1. (10%) Free financing is available at Kangaroo Autos for a brand-new, $10,000 vehicle. After making a $1,000 down payment, you pay $300 every month for the following thirty months. Despite not providing free financing, Turtle Motors next door will give you $1,000 off the list price. If the interest rate is 0.83% each month, which business is providing a better offer?

4. (10%) For her estate in Connecticut, Marsha Jones purchased a used Mercedes horse transporter. The price was $35,000.00. The goal is to reduce the cost of renting a horse transporter. For $200 per day plus $1 per mile, Marsha had been hiring a transporter every other week. The majority of the journeys are between 80 and 100 miles long. Joe Laminitis, the driver, often receives a $40 gratuity from Marsha. She will just need to pay for maintenance and diesel fuel with the new transporter, which costs around $0.45 per mile. The annual insurance premium for Marsha's transporter is $1,200. When Marsha's horse Spike is ready to retire in eight years, the transporter will most likely be worth $15,000 (in real terms). Is the transporter a positive-NPV investment? Assume a nominal discount rate of 9% and a 3% forecasted inflation rate. Marsha's transporter is a personal outlay, not a business or financial investment, so taxes can be ignored.

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