Question
Pls, help me solve this without Excel. I got this incorrect. A young graduate is trying to decide whether to lease or buy a car
Pls, help me solve this without Excel. I got this incorrect.
A young graduate is trying to decide whether to lease or buy a car for the next three years. The cash flows for each choice are shown below. (We will ignore gas, insurance, and tag fees.)
| YEAR | 0 | 1 | 2 | 3 |
|---|---|---|---|---|
| LEASE | -$4,293.00 | -$3,500.00 | -$3,500.00 | -$3,500.00 |
| PURCHASE | -$35,772.00 | 0 | 0 | $26,775.00 |
The graduate has a personal discount rate of 6.00%.
What is the NPV of leasing the car for three years? (HINT: Answer will be a NEGATIVE number)
Answer format: 2 decimals
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Investment Science
Authors: David G. Luenberger
1st Edition
0195108094, 978-0195108095
