BUSN 380 help Making Decisions/uophelp.com BUSN 380 help Making Decisions/uophelp.com | Page 74

Problem Set 5
1. Tammy Monahan is considering the purchase of a home entertainment
center. The product attributes and weights she plans to consider are:
portability .1
sound projection .6
warranty .3
Tammy rated the brands as follows:
Using the Consumer Buying Matrix (p. 252), conduct a quantitative
product evaluation rating for each brand. What other factors is Tammy
likely to consider when making her purchase?
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2. Based on the following, calculate the costs of buying and of leasing a
motor vehicle.
Purchase Costs Leasing Costs
Down payment
$1,500 Security deposit
Loan payment
$450 for 48 months Lease payment
months
Estimated value at
End of loan
$4,000 End of lease charges
Opportunity cost interest rate: 4 percent
$500
$450 for 36
$600
3. You can purchase a service contract for all of your major appliances
for $180 a year. If the appliances are expected to last for 10 years, and
you earn 5 percent on your savings, what would be the future value of
the amount you would pay for the service contract?