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Part $1$

$$Jason$\text{'}$s car was just$$ stolen, and the police informed him that they will probably be unable to recover it$.$ His insurance will not cover the theft. Jason has a net worth of

$$$$3,0003,000,$

all of which is easily convertible to cash. Jason requires a car for his job and his daily life. Based on$$ Jason's net cash$$ flow, he cannot afford more than

$$$$400400$

in car payments. What options does he$$ have? How will these options affect his net worth and net cash$$ flow?

Part $2$

What options does Jason have and how will these options affect his net worth and net cash$$ flow?

A$.$

He can convert his net worth to cash and avoid any effect on his net cash flow. He could also borrow the needed$$ amount, which will reduce his net cash flow and net worth.

B$.$

He can convert his net worth to cash and avoid any effect on his net cash flow. He can borrow the needed$$ amount, which will reduce his net cash flow but leave his net worth unchanged.

C$.$

He can convert his net worth to$$ cash, lowering his net worth and net cash flow. He could also borrow the needed$$ amount, which will reduce his net cash flow and net worth.

D$.$

He can convert his net worth to cash and avoid any effect on his net cash flow. He can borrow the needed$$ amount, which will reduce his net worth but leave his net cash flow unchanged.