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Tyler is trying to decide between two mobile phone carriers. Carrier A requires him to pay...

Tyler is trying to decide between two mobile phone carriers. Carrier A requires him to pay $300 for the phone and monthly charges of $70 for 24 months. Carrier B wants him to pay $200 for the phone and monthly charges of $90 for 12 months. Assume he will keep replacing the phone after his contract expires. His cost of capital is 6 % annually. Based on cost alone, which carrier should he choose?

a) The equivalent monthly cost for Carrier A is ------.

b) The equivalent monthly cost for Carrier B is------.

c) Tyler should choose Carrier A or Carrier B

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Expert Solution

jeff jeffy answered 1 year ago
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