Description of this paper

FIN Misc. Problems

Description

solution


Question

Question;Please show your work by submitting a Word or Excel file;LEASE FACTS;Down Payment;$ 1,500.00;Lease Term;36;Months;Lease Payments;$ 189.00;Per Month;Buy Out Price;$ 12,000.00;Market Loan Rate;8%;Sales Tax;6.75%;Title Fee;$ 15.00;Allowed Miles;36,000;Miles;Overage Miles Fee;$ 0.15;Per Mile;Excess Wear & Tear Fee Applies;5. Assume that you can buy the vehicle for $17,000 before;tax and title.;What is the NPV of the car if you lease?;What is the NPV of the car if you buy it?;(Round up to the nearest dollar amount. DO NOT use $;commas, or decimal points) (Example $-23,345.50 is entered as -23346);6.Explain to me the relationship between the NPV of the;lease versus the outright purchase. What does it mean? Is the lease a good;value compared to buying outright?;7.For the following questions, assume that the lease and buy;are both reasonable values and that you are paying a 15% interest rate (after;tax) on credit card debt. You also plan to keep the vehicle beyond the lease;term. In other words, you would exercise the purchase option at the end of the;lease term.;8. Assume for this question that you take advantage of the;opportunity to pay off credit card debt with the monthly lease savings.;What is the NPV of the lease?;What is the NPV of buying it outright?;9. Assume for this questions that you do not take advantage;of the opportunity to pay off credit card debt with the monthly lease savings.;What is the NPV of the lease?;What is the NPV of buying it outright?;(Round up to the nearest dollar amount. DO NOT use $;commas, or decimal points) (Example $-23,345.50 is entered as -23346)

 

Paper#49996 | Written in 18-Jul-2015

Price : $21
SiteLock