An auto dealership is running a promotional deal whereby they will replace your tires free of charge for the life of the vehicle when you purchase your car from them. You expect the original tires to last for 30,000 miles, and then they will need replacement every 30,000 miles thereafter. Your driving mileage averages 15,000 miles per year. A set of new tires costs $400. If you trade in the car at 150,000 miles with new tires then, what is the lump-sum present value of this deal if your personal interest rate is 12% per year?

Q: Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him…

A: The term "present value" (PV) refers to the value at the current time of a quantity of money or…

Q: You are creating a business from home and your neighbor is willing to sell to you a brand-new BBQ…

A: Minimum list price would be purchase price plus all expenses. In this case there will be no profit…

Q: dealership offers financing at 4.9% annual interest, compounded monthly for 5 years. You have $4000…

A: Cost car=$18995Interest rate=4.9%Period= 5 years

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A: Formula. P = F(1+r)n Where , P = present value F = Future value r = interest rate n = time period

Q: You are looking to purchase a new car, and you expect to have annual maintenance costs to keep it…

A: Please see the next step for the solution

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A: Lease: If the car is leased then the present value of all the cash outlays would be: When lease…

Q: find annual profit. That is, find annual profit for each of these combinations of charge per copy…

A: Fixed Costs are those costs which remain fixed irrespective of the level of activity. Variable Cost…

Q: ans are available for a company to obtain automobiles for its salesmen. Use an interest rate of 10%.…

A: In this we need to calculate the present value of both option and select the best.

Q: We have offered to contribute $6,200 at the time of your purchase. The car plan to buy will cost…

A: Annuity means a series of finite number of payments which are the same in size and occur in the same…

Q: Suppose that you decide to buy a car for $57,000, including taxes and license fees. You saved…

A: PMT = (P(r/n)) / (1-(1+(r/n))-nt) Where PMT = Monthly payment P = Principal Amount r = Annual rate…

Q: You're thinking of buying a car to travel around in, rather than paying $2,788 at the end of every…

A: We first need to determine the NPV of the cost of owning the car for 14 years. Once we have…

Q: Your company is trying to decide whether it should purchase a copier from Xerox or lease it. The…

A: Here,Purchase Cost is $145,000Annual Service Charge is $8,000Annual Lease Payments is…

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A: When a borrower borrows a loan from the lender, He has to pay some interest charges on the loan…

Q: to dealership is advertising that a new car with a sticker price of $34,128 is on sale for $25,995…

A: Effective interest rate is the interest rate considering the impact of compounding on the interest…

Q: Months Financed Maximum Car Price 48 60 f you finance the car for a shorter period of time, you can…

A: To determine the maximum car price, we need to find the PV of the monthly payment and then add the…

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A: In this question, a person needs a car and dealer give him some offers and we have to see that which…

Q: sidering buying a new car. The sticker price is $15, ment. If you can negotiate an annual interest…

A: In this we need to calculate present value factor and get monthly payment.

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A: Working note:

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A: NPV(Net Present Value) is excess of PV of inflows over initial outlay of proposal. It is calculated…

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A: First we need to calculate present value of lease payments by using equation below. Where PMT=…

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A: When an asset is purchased is on loan, the purchaser pays down payment upright and then, the…

Q: You plan to buy a new car. The car dealer offers the following two options: Opt

A: Given, Option A: $12,000 for 3 years Option B: $1000 per month for 3 years.

Q: You go into a car dealership to buy a car.  You negotiate a price of $20,000 for the car.  The…

A: Installment is the amount of periodic payments a borrower makes to its lender in order to pay back…

Q: For each purchasing option, compute • the required monthly payment, • the total amount you will have…

A: We will use the concept of time value of money here. The monthly payments are fixed over the tenure…

Q: A new American graduate is contemplating buying a Japanese, German, or American car. No matter the…

A: Working note: Calculate the average miles per year as follows: Average miles per year = Total miles…

Q: The business you are working for needs a delivery van. You just purchased a van for $70000 and plan…

A: Present value:Present value is a financial concept crucial in assessing the current worth of future…

Q: Your rental company wants to purchase a new car for its car rental business. The car costs $20,000.…

A: Lease - A lease is an option that allows using the asset immediately without any down payment. The…

Q: Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him…

A: Present value is the formula used to determine the current value of the money which is expected to…

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A: A loan refers to a contract between two parties where money is forwarded by one party to the other…

Q: You have to buy a new copier. The cost of the copier is​ $2,075​, plus ​$410 per year in maintenance…

A:

Q: You decide to earn extra money during your Engineering program by running an uber service. You…

A:

Q: Present value. A smooth-talking used-car salesman who smiles considerably is offering you a great…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Q: Walter is a used car dealer.  He has the chance to buy a used car that he thinks he can resell for…

A: Mark-up is the desired margin on a product. It is the value added above cost of the product. The…

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A: Present Value:-It is a method where an entity estimates the worth of future investment in the…

Q: .43% nominal yearly, compounded weekly, how much does this generator cost fam to purchase when…

A: Discount rate:It is the rate used to evaluate the amount of money that will be invested in the…

Q: It will cost $6,000 to acquire an ice cream cart Cart sales are expected to be $3.000 a year for…

A: Here,Cost is $6,000Annual Sales is $3,000Time Period is 4 yearsCut off Period is 3 years

Q: A cloud storage engineer purchased a new car for $31,990. Complete the table below to determine the…

A: Using excel PMT function

Q: You are a real estate agent thinking of placing a sign advertising your services at a local bus…

A: To calculate the payback period we will use the below formula   Payback period = Initial cost/Equal…