Question
The Financial Advisor is a weekly column in the local newspaper. Assume you must answer the following question, I need a new car that I
The Financial Advisor is a weekly column in the local newspaper. Assume you must answer the following question, "I need a new car that I will keep for 4 years. I have three options, I can (A) pay $24,999 now, (B) make monthly payments for a 2% 4-year loan with 0% down, or (C) make lease payments of $299,00 per month for the next 4 years. The lease option also requires an upfront payment of $1,000. What should I do?" Assume that the number fo miles driven matches the assumptions of the lease, and the vehicles value after 4 years is $8,500. Remember that the lease payments are made at the beginning of the month, and the salvage value is received only if you own the vehicle. If your MARR is 15%, the order of these choices (best to worst) is:
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