Question
Lauren purchased a car and the dealership offered financing at 4% such that her monthly payments are $694.87. If her financing rate was HIGHER than
Lauren purchased a car and the dealership offered financing at 4% such that her monthly payments are $694.87. If her financing rate was HIGHER than 4%, and given no other changes, then what would be expected?
| Her monthly payment would be higher. | ||||||||||||||||||||||||
| Her monthly payment would not change because the higher interest rate is offset by a decrease in time value. | ||||||||||||||||||||||||
| Her monthly payment would be lower | ||||||||||||||||||||||||
| Her monthly payment could be either higher or lower depending on how much higher is the interest rate. Consider a standard capital budgeting project. Which of the following would indicate that the project would be rejected under the NPV rule?
|
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