A car manufacturer is offering 36-month 2.9% APR financing or $1,500 cashback on a car....
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Accounting
A car manufacturer is offering 36-month 2.9% APR financing or $1,500 cashback on a car. The car price is $30,000. You are borrowing the cash to buy the car from a bank at 9% APR. Which of the following statements is (are) correct?
a. The payment assuming bank financing is $906.29.
b.The payment assuming special (car manufacturer) financing is $879.22.
c.The present value of special financing at the bank interest rate is $27,393.78.
d.The car buyer should choose special financing, foregoing the cashback.
e.The car buyer should choose banking financing, receiving the cashback.
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