In: Finance
Develop and present evidence supporting the one best alternative. You are the paid consultant and decision-maker. You are required to make the best decision for all clients.
$13,999 sticker price
1.2% negotiated discount
plus state sales tax
choose one plan:
0.0% APR, 1.5 years, and $400 cash allowance rebate
1.5% APR, 2 years
2.3% APR, 4 years
3.1% APR, 5 years
What type of information system?
What are your concerns and final decision?
Particulars | $ | |||||||
Sticker Price | 13999 | |||||||
Less: negotiated discount | 167.988 | |||||||
Negotiated Price | 13831.01 | |||||||
OPTION | ||||||||
Amount in $ | ||||||||
Particulars | Immediate | 2nd Year | 4th Year | 5th Year | ||||
Negotiated Price | 13831.01 | 13831.01 | 13831.01 | 13831.01 | ||||
Less :Cash Discount | 400 | 0 | 0 | 0 | ||||
Price after Cash Discount | 13431.01 | 13831.01 | 13831.01 | 13831.01 | ||||
Inflation Rate | 1 | 1.21 | 1.4641 | 1.61051 | Let's Assume inflation rate is 5% | |||
Present Value | 13431.012 | 11430.6 | 9446.77 | 8587.97 | ||||
As a best decision ,we can go for 5th year option as it is showing less costs ($8587.97) |