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There is a choice to buy a car worth $32,000 with 100% financing at 3.99%...

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Accounting

There is a choice to buy a car worth $32,000 with 100% financing at 3.99% APR for 60 month or lease at $500 per month. The car will need maintenance in the 3rd year worth $525 and $825 in the 4th year. The car will have 30% residual value in the 5th year. Sales tax on new car is 6% and required rate of return is 5%. calculate the Ownership Operating Advantage in year 5.

a. $8530

b. $7465

c. $9035

d. $8861

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