Your firm is considering the purchase of a new office phone system. You can either pay

$31,000

now, or

$1,050

per month for

33

months.

a. Suppose your firm currently borrows at a rate of

7%

per year (APR with monthly compounding). Which payment plan is more attractive?

b. Suppose your firm currently borrows at a rate of

16%

per year (APR with monthly compounding). Which payment plan would be more attractive in this case?

Question content area bottom

Part 1

a. Suppose your firm currently borrows at a rate of

7%

per year (APR with monthly compounding). Which payment plan is more attractive?

The present value of the monthly cash flows is

$enter your response here.

(Round to the nearest cent.)