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What is the discounted cash flow for the lease option

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Reference no: EM132575732

Helen was offered two options for a car she was purchasing:

Lease option: Pay lease amounts of $550 at the beginning of every month for 5 years. At the the end of 5 years, purchase the car for $13,000.

Buy option: Purchase the car immediately for $23,000.

The money is worth 6.80% compounded monthly.

Question a. What is the Discounted Cash Flow (DCF) for the lease option?

Question b. Which is the better option?

Lease Option

Buy Option

Reference no: EM132575732

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