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ssp ssp
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3 years ago
Laurie wants to buy a used sports car. She is looking at three: 1) a 3-year old Porsche 911 Turbo Cabriolet; 2) a 4-year old Ferrari F430; or 3) a 4-year old Lamborghini Gallardo. The purchase price, annual operating costs and resale value for each car is given in the table, below. Laurie wants to buy the cheapest of the three cars. Which should she buy? 

Cash flows for Sports Cars ($000s)
TimePorscheFerrariLamborghini
0-150-206-190
1-6-6-6
2-6-6139
3-61340
4-600
57000
n532
NPV =-$169.87-$110.33-$76.39
PVIFA3.992712.5770971.783265


▸ Porsche

▸ Ferrari

▸ Lamborghini

▸ Either the Ferrari or the Lamborghini (both the same)

▸ All three are equally expensive
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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redpink81redpink81
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#1
Posts: 73
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3 years ago
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ssp Author
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3 years ago
Just got PERFECT on my quiz
patyfeitosa
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
Harvinder
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2 hours ago
Helped a lot
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