a. What is the total cost of the delivery van including purchase price, sales tax, and documentation fee; and how much is classified as an asset on the balance sheet and how much is classified as an expense on the income statement? b. How much cash must Foxtrot Corporation have to make the down payment? c. How much of the first monthly payment will be interest and how much of the last monthly payment will be interest
Foxtrot Corporation is purchasing a new Ford Transit delivery van for $24,600. Its lender requires a maximum loan to value ratio of 80% on the purchase price of the vehicle. The term of the loan is 5 years. The interest rate is 5% APR. The loan is a closed end credit loan. There is no trade-in. Sales tax is 7%. Documentation fee is $275.
a. What is the total cost of the delivery van including purchase price, sales tax, and documentation fee; and how much is classified as an asset on the balance sheet and how much is classified as an expense on the income statement?
b. How much cash must Foxtrot Corporation have to make the down payment?
c. How much of the first monthly payment will be interest and how much of the last monthly payment will be interest?
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