Suppose two customers have leased cars from a manufacturer. Their lease agreements are up, and they are considering whether to keep (and purchase at 60% of the new car price) their cars or return their cars. Two years ago, Kate leased a car valued new at $16,500. If she returns the car, the manufacturer could likely get $11,550 at auction for the car. Manuel also leased a car, valued new at $11,500, two years ago. If he returns the car, the manufacturer could likely get $5,750 at auction for the car.