Auto Leasing Inc. leases an automobile with a fair value of $40,000 to a customer over a four year period with payments due annually. The first payment is due on the first day of thelease. What is the annual lease payment if Auto Leasing Inc. desires a rate of return of 10% ?Note: Do not use a negative sign with your answer.$ 0

Step 1: Given Value for Calculation Present Value of Payment = pv = $40,000Time = t = 4Rate of…

Answered: Auto Leasing Inc. leases an automobile…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Annuity due. Reginald is about to lease an apartment for 30 months. The landlord wants him to make the lease payments at the start of the month. The monthly payments are $1,300 per month. The landlord says he will allow Reg to prepay the rent for the entire lease with a discount. The one-time payment due at the beginning of the lease is $33,886. What is the implied monthly discount rate for the rent? If Reg is earning 1.5% on his savings monthly, should he pay by month or make the one-time payment? What is the implied monthly discount rate for the rent? % (Round to two decimal places.)
A new homeowner is purchasing a living room set for $2,590 and must decide between two financing offers.Offer 1: $200 down payment, 24.90% interest rate, compounded monthly, for 3 years, with no payments due for 6 months and then fixed payments of $121.96 for the remainder of the loan termOffer 2: $450 down payment, 22.90% interest rate, compounded monthly, for 3 years, with no payments due for 12 months and then fixed payments of $140.48 for the remainder of the loan termPart A: What is the total cost of offer 1?Part B: What is the total cost of offer 2? Part C: Which financing offer should the new homeowner choose?
Compute the monthly payments on a 2-year lease for a $26,532 car if the annual rate of depreciation is 18% and the lease's annual interest rate is 4%. Round your answer to the nearest dollar.
Compare the cost of the following leasing agreement with the finance charge on a loan for the same time period: The value of the car is $15,000 at the beginning of the lease period, and its projected residual value at the end of three years is $4,000. The lease requires a $500 down payment. Monthly payment $315 Acquisition fee $300 Disposition charge $150 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were equal to or less than?
Problem: Please answer the following questions regarding a $300,000 Mortgage Loan with monthly amortization over 30 years and an annual interest rate of 6%. What is the loan payment for a (30 year loan (360 monthly payments) of $300,000 at 6%? Question Answer What is the monthly payment amount? Loan Monthly Payment: How much interest and how much is principle on the first payment? Interest: Principle: How much interest and how much is principle on the second payment? Interest: Principle: If after the second payment an addition $10,000 was paid on principle. How much would the interest be on the third payment? Interest:
Consider a 30-year home mortgage of $100,000 at 6% per year. What is the monthly payment? Use Theorem 1 as attached to make an amortization schedule of the first 6 months: Month (k) Principal P(k) Interest I(k) Balance due B(k) 1 2 3 4 5 6 where P(k) is the amount paid to the principal in the k’th payment, I(k) is the amount paid to interest in the k’th payment, B(k) is the balance due after the k’th payment.
Assume an apartment has a floor area of 3,000 SF. The existing rent per month is $3,000. The market level rent is $15,000 per month. Assume that the tenant is willing to enter into a voluntary vacate agreement to be bought out of his lease and that you are now negotiating a buy out price. The apartment requires an additional $200,000 in renovation to get it up to market standards. If a prevailing cap rate for this apartment is 4.0%, at what buy out price is the incremental value created by the landlord for this unit after renovations equal to zero? O $3,40,000 O $2,350,000 O $1,000,000 O $3,100,000
You are interested in leasing a new car for 36 months. • The value of the car is $22,555. • You must pay $3025 at signing, which does not include the first month’s lease payment. • The monthly lease cost for the car is $154 for 36 months. • At the end of the lease, you will need to pay a lease termination fee of $2000. • The interest rate for this type of new car is 1.90% APR. Calculate the present worth of leasing the car.
A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $48,000, there is no trade-in, and the down payment is $3,000. Find the monthly lease payment (in dollars). Assume that the residual value is 48% of the MSRP of $51,800.
You are considering either leasing or purchasing a car. You notice an ad that says you can lease the car you want for $229.00 per month. The lease term is 48 months with the first payment due at inception of the lease. You must also make an additional down payment of $1,120. The ad also says that the residual value of the vehicle is $12,760. The list price of the vehicle is $20,274, but after much research, you have concluded that you could buy the car for a total "drive-out" price of $18,600. What is the quoted annual interest rate you are actually paying with the lease? 10.23% 10.38% 7.21% 7.11% 8.22%
Your car dealer is willing to lease you a new car for $190 a month for 36 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 5.2 percent, what is the current value of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
A property owner is evaluating the following alternatives for leasing space in his office building for the next five years: Net lease with CPI adjustments. The rent will be $16 per square foot the first year. After the first year, the rent will be increased by the amount of any increase in the CPI. The CPI is expected to increase 7 percent per year. Calculate the effective rent to the owner (after expenses) for the lease using a 10 percent discount rate.

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