Isur ance, poou LO8-2 9. Buying versus Leasing a Motor Vehicle. Based on the following, calculate the costs of buying and of leasing a motor vehicle. Purchase Costs Leasing Costs Down payment $1,500 Security deposit $500 Loan payment $450 for 36 months Lease payment $450 for 36 months Estimated value at end of loan $4,000 End of lease charges $600 Opportunity cost interest rate: 4%

Isur ance, poou LO8-2 9. Buying versus Leasing a Motor Vehicle. Based on the following, calculate the costs of buying and of leasing a motor vehicle. Purchase Costs Leasing Costs Down payment $1,500 Security deposit $500 Loan payment $450 for 36 months Lease payment $450 for 36 months Estimated value at end of loan $4,000 End of lease charges $600 Opportunity cost interest rate: 4%

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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Purchase Costs Leasing Costs Down payment $ 1,900 Security deposit $ 1,040 Loan payment $ 550 for 36 months Lease payment $ 400 for 36 months Estimated value at end of loan $ 5,000 End of lease charges $ 900 Opportunity cost interest rate 5 percent Based on the costs listed in the table above, calculate the costs of buying and leasing a motor vehicle. (Round your answers to the nearest whole number.) Buying & Leasing Total purchase cost Total leasing cost
Purchase Costs Down payment $2,100 Loan payment $530 for 36 months Estimated value at end of loan $4,900 Opportunity cost interest rate 7 percent Leasing Costs Security deposit $1,410 Lease payment $520 for 36 months End of lease charges $1,430 Based on the costs listed in the table above, calculate the costs of buying and of leasing a motor vehicle. Note: Round your answers to the nearest whole number. find total purchase cost and total leasing cost.
44. Subject :- Accounting is it correct? To calculate the total cost of leasing a hybrid vehicle for 5 years, we need to consider the monthly lease payment and the down payment. Here's the breakdown: Lease Payment: Monthly Lease Payment: $80 Lease Term: 5 years (60 months) Total Lease Payments: $80/month * 60 months = $4,800 Down Payment: Down Payment: $3,000 Total Cost of Lease: Total Cost of Lease = Total Lease Payments + Down Payment Total Cost of Lease = $4,800 + $3,000
Camia Company is in the business of leasing new sophisticated equipment. As lessor, Camia expects a 12% return on its net investment. All leases are classified as a direct financing lease. At the end of the lease term, the equipment will revert to Camia Company. On January 1, 2010 an equipment is leased to a lessee with the following information.Cost of equipment to Camia-5,500,000Residual value – unguaranteed-400,000Annual rental payable in advance-959,500Useful life and lease term-8 yearsImplicit interest rate-12%First lease payment-January 1, 2010What is the total financial income to be recognized over the lease term? a. 2,576,000 b. 2,176,000 c. 1,776,000 d. 1,616,500
On January 1, 2024. Byner Company purchased a used tractor. Byner paid 55,000 down and signed a naninterest bearing note requiring 542, 000 to be paid on December 31, 2026 The fair value of the tractor is not determinable. An interest rate of 11% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December Note: Use tables, Excel, or a financial calculator. (FV of 51, PV of $1. FVA of S1, PVA of $1, FVAD of St and PVAD of $1) Required: Prepare the journal entry to record the acquisition of the tractor. How much interest expense will the company include in its 2024 and 2025 income statements for this note? What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
On January 1, 2024, Byner Company purchased a used tractor. Byner paid $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare the journal entry to record the acquisition of the tractor. How much interest expense will the company include in its 2024 and 2025 income statements for this note? What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
Sony Inc. is a lessor-manufacturer of expensive machinery. On January 1,2011, amachinery is leased to another entity with the following information:Annual rental payable at the end of each year P200,000Lease term 4 yearsUseful life of machinery 5 yearsCost of Machinery 300,000Estimated residual value 50,000Initial direct cost paid by lessor 20,000Incremental borrowing rate of lessee 14%Implicit interest rate of lessor known to lessee 12%Note: At the end of the lease term on December 31,2014, the machinery will revert to lessor.Problem 17. Except from the fact that the leased machinery will not revert to lesser because there is bargain purchase option of P50,000 at the end of lease term.Required: Based on the result of your audit, determine the following:____________1. Gross Lease Receivable____________2. Sales or Net Investment____________3. Unearned Interest____________4. Profit on saleDirect Finance Lease – Lessor (PAS 17 and PFRS
A car manufacturer has a car with a carrying value of €18,000 on their balance sheet. The manufacturer enters into a car lease agreement with a customer over a four year period. The customer will pay €6,000 per year and the least interest rate is 4%. Show how the manufacturer will account for this agreement and the effect on the balance sheet, income statement and cash flow over the lease period. Show how this lease agreement would be accounted for by the manufacturer if significant risks of ownership had not been transferred to lessee. Explain the reasons a company may prefer to lease an asset rather than purchase.
RENT Connors Construction requires a large number of leased equipment to be purchased. The equipment costs $ 100. One option is to borrow $ 100 from a local bank and use it to purchase the equipment. Another option is a statement of the company's financial position before buying or renting equipment is shown as follows: Current assets Fixed assets Total assets $ 300 Debt 500 Equity $ 800 Liabilities and total equity $ 400 400 $ 800 What is the company's debt ratio if you decide to buy equipment? What if the lease and lease are not stipulated in the report's financial position? Is the financial risk of pecusalom different if you buy it rented? Explain.
Please solve. ASAP. Thank you. On January 1, 20x1, Chirp Co. entered into a 4-year lease agreement with Birds, Inc. for a piece of industrial equipment. Lease payment is P100,000, payable annually starting on January 1, 20x1. Chirp Co. knows that the lessor expects a 10% return on the lease. Chirp Co. has a 12% incremental borrowing rate. The equipment has an estimated useful life of 5 years and a residual value of P25,000. The lease agreement contained a purchase option that is exercisable at the end of the lease term for P50,000. It is reasonably certain that ChirpO Co. will exercise the purchase option. Chirp Co. uses the straight line method of depreciation. Requirements: 1. Provide the journal entries on Jan. 1, 20x1, Dec. 31, 20x1 and 2. Jan. 1, 20x2. 2. Prepare Chirp Co.'s Dec. 31, 20x1 partial statement of financial position and partial statement of comprehensive income. Indicate current and noncurrent assets and liabilities.
Pat Delaney Company leases an automoble with a fair value of $8725 from John Simon Motors, Inc.on the following terms: 1. Nonconcealable term of 50 months. 2. Rental of $200 per month (at the end of each month). (The present value at 1% per month is $7840). 3. Estimated residual value after 50 months is $1180 (The present value at 1% per month is $715). Delaney Company guarantees the residual value of $1180. 4. Estimated economic life of the automobile is 60 months. 5. Delaney Company's incremental borrowing rate is 12% ayear (1% a month). Simon's implicit rate is unknown. Questions: a) What is the present value of the minimum lease payments? b) Record the lease on Delaney Company's book at the date of inception. c) Record the first month's depreciation on Delaney Company's books (Assume straight-line). d) Record the first month's lease payment
Use PMT P(r/n) / (1- (1+r/n)-nt to determine regular pymt amt, rounded to nearest dollar. Home cost $209,000, bank requires 20% down pymt and 3pts at closing. The cost of the home is financed for 30-year fixed rate at 9.5%. P=$209,000 - $41,800 = $167,200 Down Pymt= $41800 Rate= 9.5% or 0.095 Time = 30 years fixed Points= 3 or 0.03 (167200*0.03=5106) N=12 167200(0.095/12) = 1323.666666666667 divided by: (1-(1+0.095/12)-12(30) = -360 (1-(1.007916666666667)-360 = HOW DO I CALCULATE this, this is where I am getting stuck on the calculator. I keep getting this answer 17.09486179680438, when I do 1.007916666666667-360 Please help me understand what I'm doing wrong on the bottom calculation.

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