Question: Hi. I send you 2 questions, could you please help me check because the results that you sent me 2 days ago was not correct.

Hi. I send you 2 questions, could you please help me check because the results that you sent me 2 days ago was not correct. Thanks

Question 1

Cassandra was offered two options for a car she was purchasing:

Lease option:Pay lease amounts of $550 at the beginning of every month for 6 years. At the the end of 6 years, purchase the car for $13,500.

Buy option:Purchase the car immediately for $27,000.

The money is worth 7.70% compounded MONTHLY

a.What is the Discounted Cash Flow (DCF) for the lease option?

Round to the nearest cent

b.Which is the better option? Lease Option OR Buy Option?

Question 2

Erica purchased two trucks for her warehouse for a total of $51,000. This investment saved her $10,500 in truck rental charges every year (from the 1st year), for 8 years. At the end of year 8, she sells both the trucks for a total of $15,000.

a.What is the Net Present Value (NPV) of the investment if the required rate of return is 8%?

b.Does the investment meet the required rate of return? Yes or No

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