12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively, Marlon can lease the car for $4000 per year. a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the cost of lost interest on the money used for the purchase. b) Calculate the cost of leasing the car for five years. c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively, Marlon can lease the car for $4000 per year. a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the cost of lost interest on the money used for the purchase. b) Calculate the cost of leasing the car for five years. c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 7EB: Kenzie purchased a new 3-D printer for $450,000. Although this printer is expected to last for ten...
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Transcribed Image Text:12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the
money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively,
Marlon can lease the car for $4000 per year.
a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the
cost of lost interest on the money used for the purchase.
b) Calculate the cost of leasing the car for five years.
c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
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