Be a Financial Planner-Discussion Case 1 This case is available in MyFinancelab. Samuel and Grace Paganelli want to replace their 1996 pickup, which Samuel drives for work They already own two vehicles, but they need to replace Samuel's truck because it has nearly 225,000 miles on the odometer. The replacement must be a vehicle that fits his job as a self employed electrician. Samuel knows that he drives a lot on the job and is worried about the high-mileage penalty on many leases, as well as the fees for excessive wear and tear. However, Grace is more concerned about the depreciation loss on a new truck purchase than the mileage penalty and would rather lease the new vehicle. She also likes the idea of having a new, safer truck every few years without the hassle of resale. Samuel also does not like the fact that, if they lease, they would not own the vehicle he will use for work. Warranty protection to insure the truck remains in service is very important. They feel that they can afford to spend $50 per month over 4 years for a new vehicle, as long as their other associated expenses such as insurance, gas, and maintenance are not too high. The Paganellis also do not know where to start looking for a vehicle without the hassle of negotiating with dealerships.
Be a Financial Planner-Discussion Case 1 This case is available in MyFinancelab. Samuel and Grace Paganelli want to replace their 1996 pickup, which Samuel drives for work They already own two vehicles, but they need to replace Samuel's truck because it has nearly 225,000 miles on the odometer. The replacement must be a vehicle that fits his job as a self employed electrician. Samuel knows that he drives a lot on the job and is worried about the high-mileage penalty on many leases, as well as the fees for excessive wear and tear. However, Grace is more concerned about the depreciation loss on a new truck purchase than the mileage penalty and would rather lease the new vehicle. She also likes the idea of having a new, safer truck every few years without the hassle of resale. Samuel also does not like the fact that, if they lease, they would not own the vehicle he will use for work. Warranty protection to insure the truck remains in service is very important. They feel that they can afford to spend $50 per month over 4 years for a new vehicle, as long as their other associated expenses such as insurance, gas, and maintenance are not too high. The Paganellis also do not know where to start looking for a vehicle without the hassle of negotiating with dealerships.
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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What is the highest price they can pay on the new vehicle if they can afford a down payment of $4,000?Assume they finance their purchase for 48 months at 7.5%?
Transcribed Image Text:Be a Financial Planner-Discussion Casé 1
This case is arailable in MyFinancelab.
Samuel and Grace Paganelli want to replace their 1996 pickup, which Samuel drives for work.
They already own two vehicles, but they need to replace Samuel's truck because it has nearly
225,000 miles on the odometer. The replacement must be a vehicle that fits his job as a self-
employed electrician.
Samuel knows that he drives a lot on the job and is worried about the high-mileage penalty on
many leases, as well as the fees for excessive wear and tear. However, Grace is more concerned
about the depreciation loss on a new truck purchase than the mileage penalty and would
rather lease the new vehicle. She also likes the idea of having a new, safer truck every few years
without the hassle of resale. Samuel also does not like the fact that, if they lease, they would not
own the vehicle he will use for work. Warranty protection to insure the truck remains in service
is very important.
They feel that they can afford to spend $550 per month over 4 years for a new vehicle, as
long as their other associated expenses such as insurance, gas, and maintenance are not too
high. The Paganellis also do not know where to start looking for a vehicle without the hassle of
negotiating with dealerships.
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