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Question: Horizon Ford advertises that it will sell you a Ford Taurus for $24,000 or lease it to you. To lease it, you must make a down payment of $3000 and agree to pay $3000 at the end of each of the next two years. After the last lease payment, you may buy the car for $20,000. If you plan to keep the car for at least 10 years and the market interest rate is 10 percent, which approach has a lower present value of costs? Show your work.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92585786

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