Decide between two mobile phone carriers

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Tyler is trying to decide between two mobile phone carriers. Carrier A requires him to pay $500 for the phone and monthly charges of $70 for 36 months. Carrier B wants him to pay $300 for the phone and monthly charges of $80 for 30 months. Assume he will keep replacing the phone after his contract expires. His cost of capital is 55%. Based on cost alone, which carrier should he choose What are the equivalent monthly cost for both carrier?

Reference no: EM132014725


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