Question: Problem 4 (3 points). Alternatives Cost Comparison (using PW) Of the two alternatives below, which car should you buy? Compare these alternatives using present worth

Problem 4 (3 points). Alternatives Cost Comparison (using PW) Of the

Problem 4 (3 points). Alternatives Cost Comparison (using PW) Of the two alternatives below, which car should you buy? Compare these alternatives using present worth analysis. Assume an interest rate of 4%. Purchase Cost Lifetime Salvage Value Annual Gas & Maintenance $2,200 Ford S20,000 10 vears S500 Lexus S35,000 15 vears $2,250 $1,500 a) Over how many years should you compare these two alternatives? b) Draw the Ford cash flow diagram. c) What is the present worth of the Ford over the timeframe stated in (a)? d) Draw the Lexus cash flow diagram e) What is the present worth of the Lexus over the timeframe stated in (a)? f) Which car should you buy? Justify your

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