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1. A used car can be purchased for 5000 cash today, or instead can be...

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1. A used car can be purchased for 5000 cash today, or instead can be financed as follows: pay 2400 today, then pay 1500 at the end of each year for the next two years. (a) At an interest preference rate of 5% annually, should a purchaser pay cash or finance the car? Use a net present value argument. (b) Determine all interest preference rates i such that the financing option is better than the cash option. Justify your answer algebraically

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