There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month. The car will need maintenance in the 3rd year worth $525 and $825 in the 4th year. The car will have 35% residual value in the 5th year. Sales tax on new car is 6% and required rate of return is 5%. Which option is better

Q: Brand B car costs $79,000 and has a life of 8 years. It costs $2,500 a year in  insurance, and $525…

A: given Cost of Brand B $79000 and Brand M us $67000 Life of Brand B is 8 years and life of Brand M is…

Q: Lamar plans to buy a used truck that costs $20,000. The dealer requires a 20% down payment. The rest…

A: Loan installment is that which is paid by borrower to lender for a specified period of time. This…

Q: Your second financing option for the SUV is the dealership will take $500 off the original $22,510…

A: Monthly payment The minimum amount needs to be paid by the person in an account every month.

Q: You are at a dealership considering the purchase of a car that would cost $34,000 if paid for in…

A: We shall use Excel's =NPER formula to calculate the total payments that would be required under the…

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is…

A: Balloon payment is the final payment made at the end of loan to close and settle the loan and close…

Q: Option A: Buying a car at a discounted price of $24,048 in cash now. Option B: Buying a car at the…

A: Present value is the current value of future cash flows.

Q: Compare the cost of the following leasing agreement with the finance charge on a loan for the same…

A: Capital cost reduction Capital cost reduction is paid initially on a lease to reduce the interest…

Q: Many individuals prefer to lease their vehicles rather than buy them. A new Audi Q7 can be leased…

A: Lease: If the car is leased then the present value of all the cash outlays would be: When lease…

Q: You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

Q: ans are available for a company to obtain automobiles for its salesmen. Use an interest rate of 10%.…

A: In this we need to calculate the present value of both option and select the best.

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is $94,…

A: To find the balloon payment for the Tesla Model X SUV:- Calculate the monthly interest rate using…

Q: Show complete solution: Consider the following options in purchasing a car:   Option 1 = purchase…

A: Calculation of which option are more economical are as follows

Q: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $200 for…

A: Step 1:Equivalent Monthly Cost=Initial Cost*(r/12)/(1-1/(1+r/12)^n)+Monthly charges  Step 2:Carrier…

Q: Calculate the monthly payment for each option given: You are purchasing a car at a price of $21,101.…

A: First Option: Price of car = $21,101 Rebate = $1000 Thus, final value = $20,101 Rate = 6% Time…

Q: 1. You have a choice of leasing a truck for six years at $9,000/year, paid at the end of each year,…

A: We need to compute present value of lease option and than shall compare the same with the cost of…

Q: You are interested in buying a new car. The sticker price is $38, 616.00 and you have $3,434.00 to…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is…

A:

Q: You're thinking of buying a car to travel around in, rather than paying $2,788 at the end of every…

A: We first need to determine the NPV of the cost of owning the car for 14 years. Once we have…

Q: You are going to buy a new rooftop tent for your SUV/Truck. You can either pay $2,100 today for the…

A: We have to calculate present value of both option to compare which option is preferable.

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: The time value of money is a concept in finance that considers the effect of compounding into…

Q: You are considering either leasing or purchasing a car. You notice an ad that says you can lease the…

A: When a car is purchased it is purchased by auto loan and that is paid by monthly payment and there…

Q: Months Financed Maximum Car Price 48 60 f you finance the car for a shorter period of time, you can…

A: To determine the maximum car price, we need to find the PV of the monthly payment and then add the…

Q: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay   $210…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Financed for 48 months: $17,267.77Financed for 60 months: $19,621.38

Q: You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Given,  Amount saved for Down payment is $5000 Amount of monthly payment is $500 Rate is 6%

Q: A car manufacturer is offering the choice of a 0.5% loan compounded monthly for 72 months or $2000…

A: The sum borrowed or loan taken to meet the specific business or personal requirements is regarded as…

Q: payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 me…

A: The monthly payment consist of payment of principal and interest to be paid over the life of…

Q: Your company wants to purchase a photostat machine which costs RM15,000. It will be obsolete in 5…

A: A company considering the purchase of an asset, whose ownership is just incidental to using the…

Q: You are considering purchasing a 2021 RX Hybrid for $47,920. The Lexus dealer is offering the…

A: In this question all the option have mortgage in it and monthly payment is required.

Q: There is a choice to buy a car worth $32,000 with 100% financing at 3.99% APR for 60 month or lease…

A: An individual decides to purchases or leases an asset by evaluating the cost of both the…

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Given data; down payment amount = $3000 monthly payment = $400 Annual interest rate = 12% number of…

Q: NPV

A: Formula to calculate the NPV is: NPV = Cash flows/(1+i)^n - Initial investment

Q: you are buying new television. from past experience you estimate future repair cost as P500 during…

A: Capital Budgeting is the process of assessing long-term decisions made by management in order to…

Q: Suppose you decide to obtain a 4-year lease for a car and negotiate a selling price of $28,990,…

A: Negotiated price of car$28,990Down payment$2,400Trade in value of old car$3,850Money…

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: We take loans to buy expensive things like a car, a yacht, etc. which we otherwise are not capable…

Q: Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him…

A: Present value is the formula used to determine the current value of the money which is expected to…

Q: Ford Motor company is offering the following deals: 0% APR for 60 months or a $4,000 rebate. the…

A: Rebate = $4000 Interest rate = 3.6%  Purchase price = $28,750 Loan period = 60 months

Q: Assume the car can be purchased for 0% down for 60 months (in lieu of rebate). A car with a sticker…

A: A loan refers to an agreement where money is given by one party to the other party on the promise of…

Q: A Chevrolet Sonic Hatchback costs $14,640.00. With a 9%​ down payment, you can have an amortized…

A: Initial cost of car = $14,640Down payment = initial cost of car * 9% = 14,640 * 0.09 = $…

Q: Suppose you can buy a new Toyota corolla for $20000 and sell it for $12000 in third year. For…

A: Lease and buy decisions are a kind of capital budgeting decisions that an investor or a company…

Q: A. If i buy a car from a dealership for $27000 with 2.5% paying monthly for a total of 3 years how…

A: Future value :— It is the value of present money in the future date.    Future value = Present Value…

Q: Problem: Yuseff was able to sell a car whose suggested retail price is $1,2000.000. The vehicle will…

A: In this question the retail price is lower than the down payment which is not possible. So let’s…

Q: Suppose that you are thinking about buying a car and have narrowed down your choices to two options.…

A: Loan repayments are usually made through periodic (usually monthly) fixed payments. This periodic…

Q: You are considering either buying or leasing a vehicle. The following data have been compiled:If…

A: The question is based on the concept of lease and buying decision. The same can be calculated as…

Q: Your old car costs you $300per month in gas and repairs. If you replace​ it, you could sell the old…

A: Net present value is present value of cash flows. For Alternative 1: Initial cash outflow is the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.