Sandy is nearing the end of her closed-end lease for her Ford Escape. She will not exceed her allocated miles and the car is in very good shape. Which lease component will amount to the total money she will have paid to the dealer? A : All the choices combined B : Capitalized cost reduction C : Rent charge D : Up-front fee
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A:
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A :All the choices combined
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B :Capitalized cost reduction
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C :Rent charge
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D :Up-front fee
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- Amanda must decide to buy or lease a car that she has selected. She has negoiated a purchase price of $35,000 and can borrow money from her credit union by putting $3,000 down and paying $751.68 per month for 48 months at 6% APR. Alternatively, she could lease the car for 48 months at $495 per month by paying $3,000 capitalized cost reduction and a $350 dispostition fee on the car whic is project to have a residual value of $12,100 at the end of the lease. 1. What is the buying dollar cost? 2. What is the leasing dollar cost?Amanda Forsythe of Springfield, Missouri, must decide whether to buy or lease a car she has selected. She has negotiated a purchase price (gross capitalized cost) of $30,000 and could borrow the money to buy from her credit union by putting $2,500 down and paying $645.84 per month for 48 months at 6 percent APR. Alternatively, she could lease the car for 48 months at $370 per month by paying a $2,500 capitalized cost reduction and a $350 disposition fee on the car, which is projected to have a residual value of $12,200 at the end of the lease. Round your answers to the nearest cent. Finance charges (borrowing the car): $ The dollar cost of leasing: $Amanda Forsythe of Springfield, Missouri, must decide whether to buy or lease a car she has selected. She has negotiated a purchase price (gross capitalized cost) of $38,000 and could borrow the money to buy from her credit union by putting $3,300 down and paying $814.93 per month for 48 months at 6 percent APR. Alternatively, she could lease the car for 48 months at $535 per month by paying a $3,300 capitalized cost reduction and a $350 disposition fee on the car, which is projected to have a residual value of $11,800 at the end of the lease. Use the Run the Numbers worksheet to advise Amanda about whether she should finance or lease the car. Round your answers to the nearest cent.
- Amy Lloyd is interested in leasing a new Honda and has contacted three automobile dealers for pricing information. Each dealer offered Amy a closed-end 36-month lease with no down payment due at the time of signing. Each lease includes a monthly charge and a mileage allowance. Additional miles receive a surcharge on a per-mile basis. The monthly lease cost, the mileage allowance, and the cost for additional miles follow: Amy decided to choose the lease option that will minimize her total 36-month cost. The difficulty is that Amy is not sure how many miles she will drive over the next three years. For purposes of this decision, she believes it is reasonable to assume that she will drive 12,000 miles per year, 15,000 miles per year, or 18,000 miles per year. With this assumption Amy estimated her total costs for the three lease options. For example, she figures that the Hepburn Honda lease will cost her 36(299) + 0.15(36,000 36,000) = 10,764 if she drives 12,000 miles per year, 36(299) + 0.15(45,000 36,000) = 12,114 if she drives 15,000 miles per year, or 36(299) + 0.15(54.000 36,000) = 13,464 if she drives 18,000 miles per year. a. What is the decision, and what is the chance event? b. Construct a payoff table for Amys problem. c. If Amy has no idea which of the three mileage assumptions is most appropriate, what is the recommended decision (leasing option) using the optimistic, conservative, and minimax regret approaches? d. Suppose that the probabilities that Amy drives 12,000, 15,000, and 18,000 miles per year are 0.5, 0.4, and 0.1, respectively. What option should Amy choose using the expected value approach? e. Develop a risk profile for the decision selected in part (d). What is the most likely cost, and what is its probability? f. Suppose that, after further consideration, Amy concludes that the probabilities that she will drive 12,000, 15,000, and 18,000 miles per year are 0.3, 0.4, and 0.3, respectively. What decision should Amy make using the expected value approach?Dana wants to buy a car. The ad quotes both a cash purchase price of $37,500 and a monthly lease payment option. Since she does not have enough money to pay cash for a car, she would have to finance it from Honda by paying interest of 5.9% compounded monthly on a loan. The lease option requires payments of $594 a month for 48 months with a $1,330 down payment or equivalent trade. Freight and air tax are included. Dana does not have a vehicle to offer as a trade-in. If the vehicle is leased, then after 48 months it could be purchased for $16,155. The lease purchase would be based on an interest rate of 3.89%. During the term of the lease, kilometres are limited to 24,000 per year, with an additional charge of $0.08 per kilometre for excess kilometres. The costs include freight and air tax, but exclude taxes, registration. licence, and dealer administration charges. Dana is particularly impressed with the four years or 100,000 kilometre" warranty on the engine and transmission. The…The Bainters want to estimate annual costs for purchasing the home so they can compare them with the costs they estimated for renting. These costs are expenses the Bainters will have only if they purchase instead of rent: monthly mortgage payment $200 per year for HOA fees $1,750 per year for property taxes $1,950 per year for home maintenance $75 per month for water and sewer services $10 per month for trash and recycling services $65 per month for internet $110 per month for homeowners' insurance Approximately how much should the Bainters budget for a year? Your answer should include the total amount the Bainters should budget the calculations or an explanation of how you determined the answer
- Sara Beth wants to purchase a used car in excellent condition. She has decided on a car with low mileage that will cost $20,000. After considering several alternatives, she identified a local lending source that will charge her an interest rate of 6% per annum compounded monthly for a 48 month loan: (a) What will be the size of her monthly payments? (b) What will be the remaining balance on her loan immediately after making her 24th payment? (c) If she chooses to pay off the loan at the time of her 36th payment, how much must she pay? (d) What portion of her 12th payment is interest? (e) What portion of her 12th payment is an equity payment?Paula is considering the purchase of a new car. She has narrowed her search to two cars that are equally appealing to her. Car A costs $25,000, and Car B costs $25,400. The manufacturer of Car A is offering 0% financing for 48 months with zero down, while the manufacturer of Car B is offering a rebate of $2000 at the time of purchase plus financing at the rate of 3%/year compounded monthly over 48 months with zero down. If Paula has decided to buy the car with the lower net cost to her, which car should she purchase? (Round numerical values to the nearest cent.) net cost of Car A $ net cost of Car B $ car she should purchasPaula is considering the purchase of a new car. She has narrowed her search to two cars that are equally appealing to her. Car A costs $25,000, and Car B costs $25,300. The manufacturer of Car A is offering 0% financing for 48 months with zero down, while the manufacturer of Car B is offering a rebate of $2000 at the time of purchase plus financing at the rate of 3%/year compounded monthly over 48 months with zero down. If Paula has decided to buy the car with the lower net cost to her, which car should she purchase? (Round numerical values to the nearest cent.) net cost of Car A $ net cost of Car B $
- A car dealer leases a small computer with software for $5000 per year. As an alternative he could buy the computer for $7500 and lease the software for $3500 per year. Any time he would decide to switch to some other computer system he could cancel the software lease and sell the computer for $500. (a) If he buys the computer and leases the software, what is the payback period? (b) If he kept the computer and software for 8 years, what would be the benefit–cost ratio, based on a 5% interest rate?You are considering either leasing or purchasing a car. You notice an ad that says you can lease the car you want for $616.00 per month. The lease term is 48 months with the first payment due at inception of the lease. You must also make an additional down payment of $1,340. The ad also says that the residual value of the vehicle is $21,937. The list price of the vehicle is $36,624, but after much research, you have concluded that you could buy the car for a total "drive-out" price of $33,600. What is the quoted annual interest rate you are actually paying with the lease?Marisa leases a car that has a purchase price of $63,500 with an MSRP of $66,950 and decided to lease the car for 36 months. Find the monthly lease payment (in dollars) if the annual interest rate is 4.5%, the trade-in of her car was $35,000, she makes $3,000 down payment, the residual value is 35%, of the MSRP. Include a sales tax of 7.25%. Round your answer to the nearest cent.)