You want the new top of the line mobile phone. Which is a better option? Option...
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You want the new top of the line mobile phone. Which is a better option? Option 1) You purchase the phone for $1,554 plus 12% taxes and you keep your monthly phone service plan. You currently pay $50 plus 12% taxes per month for this plan. You pay one month ahead. Option 2) You lock into a monthly phone service plan (same plan features as above) for $129.33 plus 12% taxes per month for two years. This subscription offers the same phone as above for $0. Monthly plan payments are made one month ahead. Assume for both options an annual discount rate of 3.5%. You want the new top of the line mobile phone. Which is a better option? Option 1) You purchase the phone for $1,554 plus 12% taxes and you keep your monthly phone service plan. You currently pay $50 plus 12% taxes per month for this plan. You pay one month ahead. Option 2) You lock into a monthly phone service plan (same plan features as above) for $129.33 plus 12% taxes per month for two years. This subscription offers the same phone as above for $0. Monthly plan payments are made one month ahead. Assume for both options an annual discount rate of 3.5%.
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