Tom needs a car to commute to work and has found a suitable Honda Civic from a dealer for$8000. He has $3000 saved for it and can afford a monthly payment up to $250. Which of thefollowing is the best (lowest total cost) financing option for him?O a. Make a $3000 deposit and take a two year loan with monthly payments of $221.O b. Make a $2000 deposit and take a three year loan with monthly payments of $185.O c. Make a $2500 deposit and take a two year loan with monthly payments of $241.O d. Make a $1000 deposit and take a three year loan with monthly payments of $210.

Total is the amount of down payment and amount total paid in monthly payments that include payment…

Answered: Tom needs a car to commute to work and…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P

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