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Calculate the present value

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Question - Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:

Pay $35,000 for the car today.

Pay $4,000 at the end of each quarter for three years.

Required -

1-a. Assuming Denzel uses a discount rate of 12% (or 3% quarterly), calculate the present value.

1-b. Which option gives him the lower cost?

Reference no: EM133005109

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