12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively, Marlon can lease the car for $4000 per year. a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the cost of lost interest on the money used for the purchase. b) Calculate the cost of leasing the car for five years. c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively, Marlon can lease the car for $4000 per year. a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the cost of lost interest on the money used for the purchase. b) Calculate the cost of leasing the car for five years. c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the
money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively,
Marlon can lease the car for $4000 per year.
a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the
cost of lost interest on the money used for the purchase.
b) Calculate the cost of leasing the car for five years.
c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0fdf9639-40e3-4dd1-b14f-6be484268b7c%2F9b0ea35b-3e71-4339-91bd-a7b54f2d1070%2Fwsac0o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the
money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively,
Marlon can lease the car for $4000 per year.
a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the
cost of lost interest on the money used for the purchase.
b) Calculate the cost of leasing the car for five years.
c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
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