A car dealer leases a small computer with software for $5000 per year. As an alternative he could buy the computer for $7500 and lease the software for $3500 per year. Any time he would decide to switch to some other computer system he could cancel the software lease and sell the computer for $500. (a) If he buys the computer and leases the software, what is the payback period? (b) If he kept the computer and software for 8 years, what would be the benefit–cost ratio, based on a 5% interest rate?

Q: he buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: The discount point refers to the optional fee (additional fee) that the borrower pays to the lender…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: When the lender offers a loan to the borrower, he charges an interest rate on the borrowed amount…

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A: Mortgage is long-term amortized loan which is used to buy fixed assets, generally houses. Mortgages…

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A: A loan is a financial instrument that involves the lending of money by one or more individuals,…

Q: Tracy wants to buy a new car. She is provided with two options by the dealership: $6,000 cash back…

A: Cash value of car = $50,000Alternative 1: Getting CashbackIf Tracy wants to opt for cashback, she…

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A: The time value of money refers to the concept in which the value of money is considered to be…

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A: Balloon payment calculation:

Q: Assume that you are about to sell property (a vacant parcel of real estate) you own but otherwise…

A: The time value of money acknowledges that the worth of a sum of money might vary between now and in…

Q: You are purchasing a lawnmower and the salesperson is trying to convince you to buy an extended…

A: Here, Cost of warranty Today is $500 Credit from sales person at the end of two years is 4100…

Q: 1. You have a choice of leasing a truck for six years at $9,000/year, paid at the end of each year,…

A: We need to compute present value of lease option and than shall compare the same with the cost of…

Q: Kevin learns that the game he has long awaited will be released in two years. He is not sure that…

A: Future value is computed by following formula:-FV= A*(1+r)nwhereFV = future valueA = amount…

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A: When a car is purchased it is purchased by auto loan and that is paid by monthly payment and there…

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A: Net present value is the present value of cash inflows less Present value of cash inflows. It is one…

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A: To calculate the simple interest rate we will use the below formula   Interest rate = [(A-P)/P]/T…

Q: You need a new car and the dealer has offered you a price of $20,000, with the following payment…

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Q: (c) If Darrell chooses the 3-point 9.25% loan, what will be his total outlay in points and payments…

A: Downpayment = 10% of Cost of building                          = $983,000*10%…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: A mortgage is a covered loan that is used by individuals or institutions to purchase real estate.…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: Discount points are the optional fees over the agreed interest rate that a borrower has to pay to…

Q: Your brother is considering the purchase of a home rather than renewing the lease on his two-bedroom…

A: Monthly mortgage refers to an amount that is paid at every month for the repayment of total mortgage…

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Q: Emma runs a small factory that needs a vacuum oven for brazing small fittings. She can purchase the…

A: Present Value can be calculated using PV function in excelPV (rate, nper, pmt, [Fv], [type])Rate The…

Q: You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on…

A: PV is the current worth of cash flows that are expected to occur in the future.

Q: Your landscaping company can lease a truck for $8,150.00 a year for 4 years. It can instead buy the…

A: The Present Value of Ordinary Annuity refers to the concept which gives out the discounted or…

Q: Jill is leasing a $32,000 car for $599/month for three years. In three years, she expects to buy it…

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Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you…

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Q: Darrell Frye is planning to buy an office building at a cost of $983,000. He must pay 10% down and…

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Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you…

A: Simple interest per month is calculated at: = Principal * rate of interest * 1/12

Q: fter deciding to buy a new car, you can either lease the car or purchase it on a three- ear loan.…

A: Lease is a way to get the asset for a fixed time period by paying periodicals payments to other…

Q: s and what rate is optimal is often a matter of how long the buyer intends to keep the property.…

A: a) Computation of amount being financed is shown as follows: B4 f x =B2-B3   (A) (B)…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: buyer of a piece of real estate is often given the option of buying down the loan. this option gives…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: Loan amount = $982,000 Down payment = 10%  Financing terms  1. 9%-30 years - 4 points discount. 2.…