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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 $32,999 now, (B) make monthly payments for a 7% 4-year loan with 0% down, or (C) make lease payments of $425 per month for the next 4 years. The lease option also requires an up-front payment of $3500. What should I do?" Assume that the number of miles driven matches the assumptions for the lease, and the vehicle's value after 4 years is $14,500. Remember that lease payments are made at the beginning of the month, and the salvage value is received only if you own the vehicle. Based on the provided information, the Equivalent Uniform Annual Cost (EUAC) graph with the alternatives is shown below: $600.00 $550.00 $500.00 1 $450.00 1 $400.00 $350.00 $300.00 5% 7% 9% 11% 13% 15% --A --- According to the graph provided, the alternative that should not be selected is: OB OC None of the above
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