Question Details

Accounting Homework Help

You are faced with the decision of what to do with your cellularphone contract. You are given the option to buy a new i-Phone 6 for$799.98 and be off contract with AT&T, your current provider,for a monthly savings of $30/ month. You expect that the phone willlast you three years. Based on the NPV evaluation method, shouldyou purchase the phone and stay off contract? Explain why or whynot. Express your figure on an annual basis and assume that you canearn 8% on alternative investments. What alternative you willchoose? Show your calculator inputs for each decision.