A light-duty pickup truck has a manufacturer’s suggested retail price (MSRP) of $14,000 on its window. After haggling with the salesperson for several days, the prospective buyer is offered the following deal: “You pay a $1,238 down payment now and $249 each month thereafter for 39 months and the truck will be yours.” The prospective buyer’s opportunity cost is 2.4% compounded monthly. How good a deal is this relative to the MSRP?
A light-duty pickup truck has a manufacturer’s suggested retail price (MSRP) of $14,000 on its window. After haggling with the salesperson for several days, the prospective buyer is offered the following deal: “You pay a $1,238 down payment now and $249 each month thereafter for 39 months and the truck will be yours.” The prospective buyer’s opportunity cost is 2.4% compounded monthly. How good a deal is this relative to the MSRP?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A light-duty pickup truck has a manufacturer’s suggested retail price (MSRP) of $14,000 on its window. After haggling with the salesperson for several days, the prospective buyer is offered the following deal: “You pay a $1,238 down payment now and $249 each month thereafter for 39 months and the truck will be yours.” The prospective buyer’s
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