Question: 3.25. This decision tree is relatively complex compared to the ones that we have seen so far. Buying the new car does not involve any

3.25. This decision tree is relatively complex compared to the ones

3.25. This decision tree is relatively complex compared to the ones that we have seen so far. Buying the new car does not involve any risk. However, the used car has an uncertainty each year for the next three years. The decision tree is shown below, Note that it is also possible to calculate the NPVs for the ends of the branches: the natural interest rate to use would be 10%, although it would be best to use a rate that refl val

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