You can buy a car advertised for $12,000 on the following terms: (a) Pay $12,000 and receive
Question:
(a) Pay $12,000 and receive a $1,000 rebate from the manufacturer or
(b) Pay $250 a month for 4 years, for total payments of $12,000, implying 0% financing. Which is the better deal if the interest rate is 1% per month?
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Step by Step Answer:
The PV of the payments under option a is ...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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