Round dollar amounts to TWO decimal places.John leases a car with a contract that requires start-of-month payments of $331.55 for 3 yearsat 4.83% compounded monthly.a) What is the price of the car if the residual value is $15,853 at the end of the lease?ModeAN =APV =NFV =A/b) How much will John pay in total for leasing the car (without the residual value)?Total paid =

Leasepayments are paid by the monthly payments and by payment of monthly payment the right to use…

Answered: John leases a car with a contract that…

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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OLA #10.2 Natalie was offered two options for a car he was purchasing: Lease option: Pay lease amounts of $450 at the beginning of every month for 5 years. At the the end of 5 years, purchase the car for $14,000. Buy option: Purchase the car immediately for $30,000. The money is worth 7.70% compounded monthly. a. What is the Discounted Cash Flow (DCF) for the lease option? b. Which is the better option? Lease Option Buy Option Kindly use all the decimals DO NOT ROUND
Your lease calls for payments of $500 at the end of each month for the next 12 months. Now your landlord offers you a new 1-year lease which calls for zero rent for 3 months, then rental payments of $700 at the end of each month for the next 9 months. You keep your money in a bank time deposit that pays a simple annual rate of 5 percent. By what amount would your net worth change if you accept the new lease? (Hint: Your return per month is 5%/12 = 0.4166667%.) Group of answer choices +$509.81 −$509.81 +$253.62 −$253.62 +$125.30
You need a car and decide to lease for 36 months. The original price is $20,000 and the trade value in 36 months, assuming you don't exceed the mileage allowance, is $5,000 (treat this as a future value). No down payment is required. If the interest rate is 9% APR compounded monthly, what is the lease payment? I need it witha solutuion $503.38 $5066.37 $5100.15 $510.67
A user has an option to renew a lease on 10,000 square feet at a rate of $8 per square foot for five years. The current market rate is $10 per square foot. What is the value of the user's leasehold interest at 10 percent?
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?
Question 1 Seroja Berhad (Seroja) wishes to evaluate the following two alternatives available to acquire a machine: Lease Alternative Seroja can lease the machine under a 5-year lease requiring lease payment of RM5,000 at the beginning of each year. All maintenance costs will be borne by the lessor and the insurance and other costs will be borne by the lessee. "Borrowing to Buy" Alternative The machine costs RM20,000 and will have a 5-year life. The purchase will be financed by a 5- year, 15% interest. Seroja will pay RM1,000 per year for a service contract that covers insurance and other costs. Seroja Berhad plans to keep the machine and use it beyond its 5-year life. The machine will be depreciated as given below: Year Depreciation RM 1 5,000 2 4,000 3 3,000 4 2,000 5 1,000 Given that the corporate tax rate is 30%. From the above information you are required to answer the following questions. a. Give explanation to Seroja on ONE (1) benefit of leasing. b. Prepare the Cash Flows…
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
Compare the cost of the following lesing agreement with the finance charge on a loan for the same time period. The price of the car is $14,000, and its projected residual value at the end of four years is $3,000. Monthly payment $250 Capital cost reduction $1,000 Disposition charge $200 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were less than Select one: a. $2,200 b. $2,000 c. $1,550 d. $1,450
None
Compare the cost of the following leasing agreement with the finance charge on a loan for the same time period. The price of the car is $25,000, and its projected residual value at the end of five years is $10,000. Monthly payment $450 Capital cost reduction $1,700 Disposition charge $400 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were less than Group of answer choices $14, 100. $15,500. $12,900. $400.
You just leased a Honda Civic that sells for $25,350. The terms of your lease require you to make 60 payments of $310 per month with the first payment due the day the car was leased. At the end of 5 years you would have to pay $11,862 to buy the car. What effective rate are you paying on the car lease? 5.46% 5.38% 31.87% 5.51% 5.60%

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