... In other words, they can not get discount in 5th year or later. 6. The rental charges are what the customer totally needs to pay if he rent a set, in other words, maintenance expenses and other similar payment accruing during the rent period are not paid by the customer. 7. Depreciation is not recorded since it does not belong to cash outflow. Part 2 Analysis In order to analyze whether the advert is misleading, a method can be used that is estimating the extent to which the rental payment in net present value is equivalent to their offer. But there are two options in front of it: replace the first TV set or not, because at the end of 4th year, the customer faces such two options. o The first option: not to replace 1. Present cost calculation: t 0 1 2 3 4 5 6 7 8 9 10 cash outflow 560 0 0 0 0 56 56 56 56 56 56 Under assumptions in part 1, present cost= 726.5833 2. Sensitivity analysis: Calculation is made in detail in ...

See this essay or coursework document in full right now