Question
Kate is trying to find the optimal timing to buy a new car.She read that the price of the type of system you are interested
Kate is trying to find the optimal timing to buy a new car.She read that the price of the type of system you are interested in is likely to fall over the next three years, as follows: price today = $1000, price in 1 year = $980, price in 2 years = $960, price in 3 years = $940.Assuming that the present value of your expected benefit from the new car is $1100 whenever she buys it, and her personal discount rate is 18%, what is the optimal time for you to buy the new car?
aa) in 3 years
bb) in 2 years
c) It makes no difference, all are equally optimal times to buy
d) Today
e) In 1 year
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