Nakatomi Lexus. Nakatomi Lexus buys its cars from Lexus Motors (U.S.), and sells them to U.S. customers. One of its customers is EcoHire, a car rental firm that buys cars from Nakatomi Lexus at a wholesale price. Final payment is due to Nakatomi Lexus in six months. EcoHire has bought USD800,000 worth of cars from Nakatomi, with a cash down payment of USD160,000 and the balance due in six months without any interest charged as a sales incentive. Nakatomi Lexus will have the EcoHire receivable accepted by Alliance Acceptance for a 2% fee, and then sell it at a 3% per annum discount to Wells Fargo Bank. a. What is the annualized percentage all-in cost to Nakatomi Lexus? b. What are Nakatomi's net cash proceeds, including the cash down payment?
Nakatomi Lexus. Nakatomi Lexus buys its cars from Lexus Motors (U.S.), and sells them to U.S. customers. One of its customers is EcoHire, a car rental firm that buys cars from Nakatomi Lexus at a wholesale price. Final payment is due to Nakatomi Lexus in six months. EcoHire has bought USD800,000 worth of cars from Nakatomi, with a cash down payment of USD160,000 and the balance due in six months without any interest charged as a sales incentive. Nakatomi Lexus will have the EcoHire receivable accepted by Alliance Acceptance for a 2% fee, and then sell it at a 3% per annum discount to Wells Fargo Bank. a. What is the annualized percentage all-in cost to Nakatomi Lexus? b. What are Nakatomi's net cash proceeds, including the cash down payment?
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
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Transcribed Image Text:16.1 Nakatomi Lexus. Nakatomi Lexus buys its cars from Lexus Motors (U.S.), and sells them to
U.S. customers. One of its customers is EcoHire, a car rental firm that buys cars from Nakatomi
Lexus at a wholesale price. Final payment is due to Nakatomi Lexus in six months. EcoHire has
bought USD800,000 worth of cars from Nakatomi, with a cash down payment of USD160,000
and the balance due in six months without any interest charged as a sales incentive. Nakatomi
Lexus will have the EcoHire receivable accepted by Alliance Acceptance for a 2% fee, and then
sell it at a 3% per annum discount to Wells Fargo Bank.
a. What is the annualized percentage all-in cost to Nakatomi Lexus?
b. What are Nakatomi's net cash proceeds, including the cash down payment?
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