After deciding to buy a new car, you can either lease the car or purchase it on a four-year loan. The car you wish to buy costs $40,000. The dealer has a special leasing arrangement where you pay $109 today and $509 per month for the next four years. If you purchase the car, you will pay it off in monthly payments over the next four years at an APR of 7 percent. You believe you will be able to sell the car for $28,000 in four years. a. What is the present value of leasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value of purchasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What break-even resale price in four years would make you indifferent between buying and leasing? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

Answer 1

Answer:

a. In order to determine the present value of lease we can use the same APR as the car loan (7%). We can use the present value of an annuity formula:

PV = monthly payment x annuity factor

monthly payment = $509PV annuity factor, 0.58333%, 48 periods = 41.76344

PV of the annuity = $509 x 41.76344 = $21,257.59

total present value of lease contract = $21,257.59 + $109 = $21,366.59

b. the present value of purchasing the car is $40,000 - $28,000/1.07⁴ = $40,000 - $21,361.07 = $18,638.93

c. the break even resale price = (sales price - PV of lease) x (1 + 7%/12)⁴⁸ = ($40,000 - $21,366.59) x (1 + 0.07/12)⁴⁸ = $18,633.41 x 1.32205 = $24,634.37


Related Questions

a) The solar installation generates electric power from sunlight and incurs operating costs for cleaning
the solar modules (sometimes called solar panels) and replacing solar modules that have failed. The
annual revenue from the electric power is variable due to variable cloudiness and solar module failure
and has a mean of $2.78m and a standard deviation of $0.32m. The annual operating costs have a mean
of $0.51 and a standard deviation of $0.12m.

calculate the mean and standard deviation of the annual profit ​

Answers

Answer:

The mean of the annual profit is $2.27 m.

The standard deviation of the annual profit is $0.3418 m.

Explanation:

Let X represent the annual operating costs for cleaning  the solar modules and replacing solar modules that have failed.

And let Y represent the annual revenue from the electric power.

It is provided that:

[tex]E(X)=\$0.51\ m\\E(Y)=\$2.78\ m\\SD(X)=\$0.12\ m\\SD(Y)=\$0.32\ m[/tex]

It is known that:

Annual Profit (Z) ​= Annual Revenue (Y) - Annual Operating Costs (X)

Compute the mean of the annual profit ​as follows:

[tex]E(Z)=E(Y-X)[/tex]

        [tex]=E(Y)-E(X)\\=2.78-0.51\\=2.27[/tex]

The mean of the annual profit is $2.27 m.

Compute the standard deviation of the annual profit ​as follows:

[tex]SD(Z)=\sqrt{V(Y-X)}[/tex]

        [tex]=\sqrt{V(Y)+V(X)-2Cov(X,Y)}\\=\sqrt{V(Y)+V(X)}\\=\sqrt{(0.32)^{2}+(0.12)^{2}}\\=0.3418[/tex]

The standard deviation of the annual profit is $0.3418 m.

URGENT NEED HELP


Which of the following items appear on your credit report?
a. Your current income
b. A student loan you're still paying off
c. Your bank balance
d. Your GPA

Answers

The correct one should be
D. Your GPA

If you take an assessment that measures your behavioral characteristics in certain situations, which inventory are you taking?

Answers

i think it’s personality

Ernesto excels at mathematics and has a keen eye for analyzing information. He is also a skilled communicator and does an excellent job explaining things to other people. Ernesto enjoys using the computer to generate reports to summarize his findings. Which is most likely Ernesto’s job title?

Answers

Answer:

accountant

Explanation:

They make finance reports and have to explain them to people. Dealing with large amounts of money take time and talent and his excels in mathematics.

Why do governments want to
keep their economies growing?

Answers

Answer:

to get stronger and have more power

how do you open your own business

Answers

Answer:

by becoming a scientist.........

By doing good in school I think!!!!!!!!!!!!!!!!!!.................

Why is education base of an occupation? Explain.​

Answers

Occupational education refers to a total program of education oriented to the world of work. Occupational education should be gin to take form in the elementary school with a basic introduction to the world of work in terms appropriate to the maturity level of the students.

What kinda of block can result from poor language skills

Answers

Answer:

Lack of communication can cause minunderstanding and confusion with both parties

Explanation:

What are high-risk loans?
A.
loans that are invested in high-risk stocks
B.
loans that are given for risky home properties
C.
loans that are given to consumers with bad credit
D.
loans that are provided by commercial banks

Answers

I would say “C” correct me if I’m wrong

Answer:

C.

Explanation:

If you have bad credit you may be less likely to be able to fulfill your loan agreement.

journal entries commenced business with cash Rs.50,000

Answers

Answer:

cash dr

Explanation:

to capital A/c ( being bussined started cash)

What is globalization

Answers

Globalization is when a business or an industry expands worldwide to cover more countries in order to generate more income and influence over the world.

Globalization A business or industry "goes global" when it expands to more nations in order to make more money and have more sway over the world.

What is globalization?

The term "globalization" refers to the increasing interdependence of the economies, cultures, and inhabitants of different countries as a result of technological advancements, cross-border trade in goods and services, and international flows of capital, people, and information.

Globalization is the quickening of worldwide movements and exchanges (of people, things, services, money, technologies, or cultural norms). Globalization encourages and boosts interactions between various communities and locations around the world, which is one of its consequences.

Therefore, Globalization A business or industry "goes global" when it expands to more nations

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A pillow is a raw material?
True
O False

Answers

False, a pillow is not a raw material. However, it's made of raw materials like:

- polyester

- linen

- satin

- silk

- etc....

help would be appreciated please :)

Answers

Answer:

I believe C is the correct answer because the overall cost of everything would be the cost of the concert and the things that have to do with ir

My other guess is A..

It is ____ to say that Cold Goose’s net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company’s annual contribution to retained earnings, $869,437 and $1,133,180, respectively. This is because _____ of the items reported in the income statement involve payments and receipts of cash.

Answers

Answer:

The answer is "Incorrect and all but one".

Explanation:

It's wrong because it assumes that its millennial generations of Cold Goose through financing activities only at end of Years second and third were equivalent to both the employer payment of its organization to preserved profits, $869,437, and $1,133,180 separately.  It is because transactions including payable accounts are included in everything but several of the items reported in the currently operated.

why do people take things so seriously on here omg

Answers

Answer:

because people are trying to be nice in these difficult times

How would a past history of criminal charges potentially affect a company's
ability to recruit highly talented employees?

Answers

Answer:The potential employees would view the company with less confidence because of the company’s past history

Explanation:

Answer:

The potential employees would view the company with less confidence because of the company’s past history

Explanation:

hurry! #2
Which of the following refers to one who tries to influence a legislator to vote for specific interests ?

muckraker

lobbyist

persuaded

advocate​

Answers

Answer:

lobbyist

Explanation:

i did research! ;)

Choose a real or made up example of a company, and describe at least three fixed costs the company has. (1-3 sentences. 1.5 points)

Answers

Answer:

Dominos also has many fixed costs. Some examples include rent, ovens, and refrigerators.

Explanation:

The fixed cost remains the fixed it never be changed.

Fixed cost;It is the cost that should be the same whether the production level increased or not. If we take an example of dominos, so here the fixed cost could be in form of rent, ovens, refrigerators. It is the part of the organization expense.

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Based on the information given In the following problem , compute the gross pay
Regular Salary: $1,100 per month
Overtime rate: $10.38 per hour ( 20 hours overtime to be paid)
Round you answer to two decimal places
Gross pay =$

Answers

Answer:

The gross pay of employee is $1307.60 per month

Explanation:

Regular salary of employee = $1,100 per month

Overtime rate per hour =  $10.38

Overtime to be paid for no. of hours = 20

So, Total overtime = [tex]10.38 \times 20[/tex]

Total overtime =$207.6

Gross pay of employee = Regular salary + Overtime

Gross pay of employee =$1,100 +$207.6

Gross pay of employee =$1307.60 per month

Hence The gross pay of employee is $1307.60 per month

How does Red Bull alter its marketing mix to appeal to its target audience?

Answers

Answer:

Explanation:by taking there produck and associtaticting with there audience loves  by sponsering or creating events for them

What is a benefit of having a good FICO score?

A- to have more difficulty buying a house

B- to achieve revolving debt

C- to get a higher interest rate on your credit card

D- to get a lower interest rate on your credit card

Answers

if you have a higher score you can get loans easy buy stuff and you will almost always qualify for the best interest rates

so the ANSWER:D

Answer:

if you have a higher score you can get loans easy buy stuff and you will almost always qualify for the best interest rates

Explanation:

Karan has been given the task to create the concept for an ad that shows the company’s product as a solution to the customer’s needs. He has also been given the directive to keep the ad true and to avoid claiming anything that the product would not be able to do. Which advertising features has Karan been asked to adhere to his ad concept?

Karan has been asked to utilize the blank and blank features of advertisement.

Answers

Answer is given below:

Explanation:

When it comes to the number of workers to run a company and you need guidance and motivation to work with full diligence to get the best product ever. Hoping that he will start helping to motivate invoices and other ideas to be completed without risk, in the hope that it will bring more profit to the company.

In a market economy, if the supply is low and demand is high, prices should drop.


True


False

Answers

Answer:

False

Explanation:

If the supply increases, the price decreases, and if the supply decreases, the price increases.

Correct Answer: False

When revising a budget, it is important to make choices that allow you to continue
money.

Answers

Answer:

saving

Explanation:

When revising a budget it is important to make choices that allow you to continue Saving money.

What is a budget?

Budget is an estimate that is made in projection of a project or task.

It helps to estimate the propose amount of money to be spent on a project and expected revenue over the time given.

Therefore, when revising a budget it is important to make choices that allow you to continue Saving money.

Learn more about budget here,

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Which of the following types of business ownership has the highest personal liability risk?

A. A partnership

B. A sole proprietorship

C. AC corporation

D. An LLC

Please select the best answer from the choices provided.

Answers

Answer:

I think A option is right

Answer:

B

Explanation:

Edge 2021

Which computer is the fastest to process complex data?

Answers


Supercomputers, the world's largest and fastest computers, are primarily used for complex scientific calculations.

Answer: D. 2.6 GHz processor, 8 GB RAM, 1 TB hard drive.

Explanation:

In Computer science, the processor speed of a computer can be defined as the number of cycles per seconds that the central processing unit (CPU) of a computer operates. The processor speed typically determines the number of information that a computer is able to execute per seconds. Therefore, the higher or faster the processor speed the faster the computer in processing complex data.

Generally, the processor speed of a computer is measured in megahertz (MHz) or gigahertz (GHz).

Additionally, Radom Access Memory (RAM) can be defined as the main memory of a computer system which allow users to store commands and data temporarily. RAM is measured in megabytes (MB) or gigabytes (GB).

Generally, the Radom Access Memory (RAM) is a volatile memory and as such can only retain data temporarily.

All software applications temporarily stores and retrieves data from a Radom Access Memory (RAM) in computer, this is to ensure that informations are quickly accessible, therefore it supports read and write of files.

Hence, the computer which is the fastest to process complex data is the 2.6 GHz processor, 8 GB RAM, 1 TB hard drive because of the higher processor speed and RAM size.

You manage the Information Systems department at a small startup Internet advertiser. You need to set up an inexpensive system that allows customers to see real-time statistics, such as views and click-throughs, about their current display ads. Which type of system will most efficiently provide a solution? CRM Enterprise system Extranet KWM Intranet

Answers

Answer:

Extranet

Explanation:

An extranet is a controlled private network in the information is accessible from an organization's intranet to partners, vendors and suppliers or an authorized set of customers.

To manage the Information Systems department at a small startup Internet advertiser and to set up an inexpensive system that allows customers to see real-time statistics, Extranet can efficiently provide a solution.

A newlywed couple was having trouble resolving their marital disputes. The husband felt like he was trying to solve all the problems because his wife would not take him seriously during their discussions and would do something else like cleaning dishes. So, they decided that they would have a "meeting" to discuss issues whenever they arose. The meeting would be at a time where they would shut out all distractions and discuss the situation until they find a solution. What is the paramount goal in this situation?

Answers

Answer:

The answer is "Process".

Explanation:

The meeting process, when more than two people are come together, usually in it is a formal atmosphere, to discuss some on subjects, however, meetings often present in several other settings.  

When both meat, while in each dispute, their pair have competing goals, it is a primary objective that pairs as more difficulties solving its dispute than for the other possible conflict objectives.

Judd owns a struggling farm that is not making a lot of money. He wonders if he is doing something wrong and
brings in an expert to teach him better methods for running his farm. Judd most likely hired someone who works in
Plant Systems
Food Products
O Agribusiness
O Natural Resources

Answers

Answer: C

Explanation:

If this is wrong I am so so sorry but I think that's by best guess

Answer

C. Agribusiness

Explanation:

What is the opportunity cost?

Answers

Answer:

the loss of other alternatives when one alternative is chosen.

Explanation:

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