ONLY RESPOND TO QUESTIONS E AND F PLEASE

Learning Goal 2 P16-5 Borrow or pay cash for an asset Mark and Stacy McCoy are set to move into their first apartment. They visited Levin Furniture, looking for a dining room table and buffet. Dining room sets are typically one of the more expensive home furnishing items, and the store offers financing arrangements to customers. Mark and Stacy have the cash to pay for the furniture, but it would definitely deplete their savings, so they want to look at all their options. The dining room set costs $14,500, and Levin Furniture offers a financing plan that would allow them to either (1) put 20% down and finance the balance at 5% annual interest compounded monthly over 48 months or (2) receive an immediate $500 cash rebate. Mark and Stacy currently earn 1.7% annual interest compounded monthly on their savings. a. Calculate the cash down payment for the loan. b. Calculate the monthly payment on the available loan. (Hint: Treat the current loan as an annuity and solve for the monthly payment.) c. Calculate the net cash outlay under the cash purchase option. d. Assuming Mark and Stacy can earn a monthly compound interest rate of 1.7% on savings, what will they give up (opportunity cost) over the 4 years if they pay cash? e. What is the cost of the cash alternative at the end of 4 years? f. Should Mark and Stacy choose the financing or the cash alternative