Construct an example where you compare two options: Leasing an automobile for a period of 3 years, and purchasing an automobile using a loan to be repaid over 4 years. Use data obtained from newspaper and/or web site advertisements, etc. Be sure to consider things like loan application fees, lease termination fees, etc. Be sure to follow the apples-versus-apples comparison principle. Use either NPV or annual equivalent costs to compare the options. Specify any plausible assumptions that you think are needed for the apples-versus-apples comparison. Ignore taxes in this analysis. Be sure to show how you obtain the monthly payments for the leasing contract and the loan. To obtain the monthly lease payment A one must solve the following relationship: (P - DP) = A(P/A, N, i) + RV(P/F, N, i) = 0 This present value equation says that the car user obtains the amount of the loan in return for N monthly payments plus the large payment at the end of the contract. In reality the large payment is the return of the car, but the loan schedule can be set up as if the loan balance at the end is equal to RV. You can solve for the monthly payment by finding the interest rate of the present value equation that makes it equal to zero. Positive elements are inflows to the car user, and negative elements are outflows.