Many individuals prefer to lease their vehicles rather than buy them. A new Audi Q7 can be leased for a down payment of $5,000 and 36 end-of-the-month payments for $699. Alternately, the car can be purchased for cash for $52,000 and a Q7 with about 40,000 miles is estimated to have resale value of $26,000 in three years from now. Should one lease or buy if opportunity cost is 5.16% APR? Show all your work.
Many individuals prefer to lease their vehicles rather than buy them. A new Audi Q7 can be leased for a down payment of $5,000 and 36 end-of-the-month payments for $699. Alternately, the car can be purchased for cash for $52,000 and a Q7 with about 40,000 miles is estimated to have resale value of $26,000 in three years from now. Should one lease or buy if opportunity cost is 5.16% APR? Show all your work.
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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Many individuals prefer to lease their vehicles rather than buy them. A new Audi Q7 can be leased for a down payment of $5,000 and 36 end-of-the-month payments for $699. Alternately, the car can be purchased for cash for $52,000 and a Q7 with about 40,000 miles is estimated to have resale value of $26,000 in three years from now. Should one lease or buy if
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