Answer:
You should buy the car.
Explanation:
Note: See the attached excel file for the worksheet that shows calculations of the present values of the Lease and Buy Options.
In the attached excel file, we have:
Net present value of Lease Option = $3,654.01
Total present value of Buy Option = $4,135.47
Difference = Total present value of Buy Option - Present value of Lease Option = $481.46
The Difference above shows that the total present value of Buy Option is greater than the net present value of Lease Option by $481.46.
Since the total present value of Buy Option of $4,135.47 is greater than the net present value of Lease Option of $3,654.01, you should buy the car.
A savings account is a savings account
Answer:A) one year
Explanation: The unbiased expectations theory, also known as the expectation theory aims to estimate how much the short term interest rates will amount to in future. This is based on long term interest rates. Forward rates are used to predict the value of interests in the future based on the values calculated today. A maturity of 1 year has the lowest interest rate because it is not given enough time to grow. Interest rates tend to grow better over a longer period of time. Therefore in terms of expectation theory the longer the maturity the better the chances of interest rate growth.
Answer:
Explanation:
When there are more substitutes for a product, the demand for the product is more price elastic. The implication of this is that the demand of such product will drop when there is increase in it price because people can get another product which will play the same role with the previous at a lesser price. Hence, the demand for the product vis more price elastic.