Purpose: This assignments will assess knowledge capital investment analysis The assignment is related to CLO4: Analyze cost behaviors using various finanical analysis. Information: Mainstream households have internet service providers. One internet provider is ABC Warner Cable. Customers at ABC Warner Cable Company require a cable modem. The cable company offers you a modem for $5.99 per month for the duration of services. An alternative option, is for the outright purchase of a modem for $79.99. Requirement: Answer the following questions, making sure to show all work and calculations. State your answer complete sentence structure, using capital investment analysis concepts. What is the payback period (in months) if you decide to purchase the ABC Warner modem?
1. What are the advantages to renting a cable modem from Time Warner?
2. What are the advantages to buying a cable model from Time Warner