Free response question

EO past paper: 2022 International Final

Mrs. Novak considers buying a used car for 20,000 euro this year (2022), which will generate expected profits of 12,000 euro in 2023 and 12,000 euro in 2024. In 2025, the car is expected to break down. These profits can be invested on the stock exchange market for a 10% annual rate of return. Her alternative option is to buy stocks on the market for 20,000 euro in 2022 with an annual 10% rate of return.