You decided to buy the new 2019 Subaru Forester cross-over SUV. Suppose that you cannot fully pay for the car up-front and you have the following 2 options for financing the car: Option 1: Finance it through PNC bank which will require a $6,000 down-payment, and 2-years worth of semi-annual payments, starting in 6 months (4 payments in total) in the amount of $6,000 each. O Option 2: Finance it through Subaru Capital Management which will require no down-payment, and 3-years worth of semi-annual payments, starting in 6 months, (6 payments in total) in the amount of $5,000 each. a) (9 points) Assuming that your opportunity cost of capital is 10% annually and interest compounds semi- annually, which financing option would you prefer? Explain why. (Assume that you have sufficient funds today to pay the down-payments if you choose option 1) b) (6 points) Suppose that your friend comes up you and offers to negotiate the terms of the loan with the financier you chose in part a). In particular, he can guarantee to lower your last payment for the financing option you chose by $3,000. What is the maximum price you would be willing to pay to your friend for this service? c) (7 points) Suppose your friend was not able to renegotiate the terms of your loan. However, you now realize that once you have completely paid off your car, you are free to resell it to someone else (assume that financiers do not allow you to resell it prior to paying off the loan). Suppose you can re-sell your car in the same period as your last payment on the loan. Following are the resale values for the car depending on how many years you have owned it for: Resell after owning 2 years: Resell after owning 3 years: Resale Value: $15,000 $10,000 How does your answer to part a) change with this additional information? Explain