The housing option that would result in the least cost will be the best financial decision. Option C is the best fit for the requirement.
Financing decision is a management term that involves decisions regarding the type of finance, the acquistion of asset, interest analysis, and so on.
The financing decision regarding buy or rent of a house can be taken after analysing the cost involved in all the options.
The cost involved in Option A for a year is:
[tex]\rm Total\:cost = Monthly \:cost + Up-front\:cost\\\\\rm Total\:cost = (\$618\times 12) + \$24,000\\\\\rm Total\:cost = \$7,416 + \$24,000\\\\\rm Total\:cost = \$33,608[/tex]
The cost involved in Option B for a year is:
[tex]\rm Total\:cost = Monthly \:cost + Up-front\:cost\\\\\rm Total\:cost = (\$950\times 12) + \$1,900\\\\\rm Total\:cost = \$11,400 + \$1,900\\\\\rm Total\:cost = \$13,300[/tex]
The cost involved in Option C for a year is:
[tex]\rm Total\:cost = Monthly \:cost + Up-front\:cost\\\\\rm Total\:cost = (\$600\times 12) + \$1,200\\\\\rm Total\:cost = \$7,2 00+ \$1,900\\\\\rm Total\:cost = \$8,400[/tex]
The option C is the most profitable one since it involves least cost. The monthly cost and the up-front cost together makes up the total cost.
If we consider the budget for 1 year, Option C will have least impact on the budgeted income and net profits.
Therefore Option C is the best financial decision.
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Answer:
Option C, the apartment on the light-rail line, is the best choice because it fits within my housing budget. Buying a home (Option A) is not possible, because I do not have enough saved for a down payment. Option B is close to my work, but it is more expensive and will not fit in my budget.
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