An automobile company recently advertised its car for a down payment of R150 000. Alternatively, the...

 

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An automobile company recently advertised its car for a down payment of R150 000. Alternatively, the car can be taken home by customers without making any payment but they have to pay an equal yearly amount of R25 000 for 15 years at an interest rate of 9% compounded annually. [13 marks] i. Sketch the cash flow diagrams. ii. Suggest the best alternative to the customers and iii. State the reason for your decision. An automobile company recently advertised its car for a down payment of R150 000. Alternatively, the car can be taken home by customers without making any payment but they have to pay an equal yearly amount of R25 000 for 15 years at an interest rate of 9% compounded annually. [13 marks] i. Sketch the cash flow diagrams. ii. Suggest the best alternative to the customers and iii. State the reason for your decision.

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i Cash flow diagrams Option 1 Down Payment of R150000 R150000 Option 2 Yearly Payments of R25000 for ... View the full answer