In its Year-End Countdown Sales, a local Cadillac auto dealer advertised 0% interest 60 months. What role
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In its Year-End Countdown Sales, a local Cadillac auto dealer advertised 0% interest 60 months. What role does the time value of money play in this promotion? Assuming that Cadillac is able to borrow funds at 8 percent interest, what is the cost Cadillac of every customer who takes advantage of this offer? If you were able to borrow to pay cash for this car, which rate would be more relevant in determining how much you might offer for the car-the rate at which you borrow money or the rate at which Cadillac borrows money?
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...
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Present value is relevant because the price of the auto must take int...View the full answer
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