Sulaiman just graduated from his study last year. Currently, he started working with one company in Alor Setar, Kedah and his job requires him to travel frequently. Sulaiman has two choices whether to purchase or to lease a car. The following information is available for him to make the decision. Purchase cost Leasing cost Security deposit Lease payment per month RM4,900 Down payment Loan payment monthly Estimated value RM860 RM520 for 108 RM598 for 96 months months of vehicle at end End-of-lease of loan RM24,000 RM1,850 charges term/ownership period Opportunity cost interest rate: 5% i) Based on the information above, determine which alternative should be considered by Sulaiman. Prove your answer with calculation.
Sulaiman just graduated from his study last year. Currently, he started working with one company in Alor Setar, Kedah and his job requires him to travel frequently. Sulaiman has two choices whether to purchase or to lease a car. The following information is available for him to make the decision. Purchase cost Leasing cost Security deposit Lease payment per month RM4,900 Down payment Loan payment monthly Estimated value RM860 RM520 for 108 RM598 for 96 months months of vehicle at end End-of-lease of loan RM24,000 RM1,850 charges term/ownership period Opportunity cost interest rate: 5% i) Based on the information above, determine which alternative should be considered by Sulaiman. Prove your answer with calculation.
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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Question
Transcribed Image Text:Sulaiman just graduated from his study last year. Currently, he started working
with one company in Alor Setar, Kedah and his job requires him to travel
frequently. Sulaiman has two choices whether to purchase or to lease a car. The
following information is available for him to make the decision.
Purchase cost
Down payment
Loan payment
monthly
Estimated value
Leasing cost
Security deposit
Lease payment
per month
RM4,900
RM520 for 108
RM860
RM598 for 96
months
months
of vehicle at end
End-of-lease
of loan
RM24,000
RM1,850
charges
term/ownership
period
Opportunity cost interest rate: 5%
i)
Based on the information above, determine which alternative should be
considered by Sulaiman. Prove your answer with calculation.
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