Question: (Problem 5 continued) a. Include the borrowing cash flows in the buy analysis. Assume equal ($10,000) payments of debt. How does this change the net

(Problem 5 continued)

a. Include the borrowing cash flows in the buy analysis. Assume equal ($10,000) payments of debt. How does this change the net cost if.054 is used as the discount rate?

b. Assume that the net cost ofbuying was computed using the cost ofcapital of 15 percent. Now include the borrowing cash flows.

How will this change the net cost ofbuying (you do not have to compute the present value)?

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