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Trent is looking to purchase a new car. If he finances the car purchase through the dealership, he can receive $2,000 cash back or 0%

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Trent is looking to purchase a new car. If he finances the car purchase through the dealership, he can receive $2,000 cash back or 0% financing. Based on his current opportunity cost of capital, Trent has calculated that the 0% financing is the most valuable option. However, before he makes his decision, interest rates unexpectedly increase. With the new, higher cost of capital, should Trent re-evaluate his choice of taking the 0% financing? Yes, the value of the 0% financing option declines with higher interest rates No, the value of the 0% financing option improves with higher interest rates Yes, the value of the cash back option improves with higher interest rates No, the value of both options is unchanged regardless of interest rates

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