ights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay...
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ights, Camera, and More sells filmmaking equipment. The company offers three purchase options: pay full cash today, pay onehalf down and the remaining onehalf plus in one year, or pay nothing down and the full amount plus in one year. George is considering buying equipment from Lights, Camera, and More for $ and therefore has the following payment options: Payment TodayPayment in One YearTotal PaymentOption $ $ $ Option Option Required: a Assuming an annual discount rate of calculate the present value and the total cost. b Which option's cost has the lowest present value?
ights, Camera, and More sells filmmaking equipment. The company offers three purchase options: pay full cash today, pay onehalf down and the remaining onehalf plus in one year, or pay nothing down and the full amount plus in one year. George is considering buying equipment from Lights, Camera, and More for $ and therefore has the following payment options:
Payment TodayPayment in One YearTotal PaymentOption $ $ $ Option Option
Required:
a Assuming an annual discount rate of calculate the present value and the total cost.
b Which option's cost has the lowest present value?
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