1. Use a spreadsheet to answer the following question: Car dealer A offers a car for $2,200 upfront (first payment), followed by $200 lease payments over the next 23 months. Car dealer B offers the same lease at a flat $300 per month (i.e., your first upfront payment is $300). Which lease do you prefer if the interest rate is 0.5% per month?

2. Here is an example of the most common use of the growing perpetuity model (called a pro forma). Your firm just finished the year, in which it had cash earnings of $100 million. Excluding this amount, you want to determine the value of the firm. You forecast your firm to have a quick growth phase for 3 years, in which it grows at a rate of 20% per annum (ending year 1 with $120 up to ending year 3 with $172.8). Your firms growth then slows down to 10% per annum for the next 3 years (ending year 4 with $190.1, etc.). Finally, beginning in year 7, you expect it to settle into its long-term growth rate of 5% per annum. You also expect your cost of capital to be 10% in your 20% growth phase, 9% in your 10% growth phase, and 8% in your 5% growth phase. Excluding the $100 million, what do you think your firm is worth today?

Please walk me through the steps. Thank you