Which option is economically better for casey

Reference no: EM133609177

Question: Casey can purchase a new car for $40,000. Alternatively, in addition to a down payment of $1,600, Casey can make lease payments of $550 at the beginning of each month for three years to lease the car. The car has a residual value of $20,000. Assume that the cost of borrowing is 4.91% compounded monthly. a. Which option is economically better for Casey? Buy Now Lease b. In the lease option, what will be the buyback value of the vehicle at the end of two years?

Reference no: EM133609177

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