Question
There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month.
There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month. The car will need maintenance in the 3rd year worth $525 and $825 in the 4th year. The car will have 35% residual value in the 5th year. Sales tax on new car is 6% and required rate of return is 5%.
1) Calculate the Ownership Operating Advantage in year 5.
a) ($939)
b) ($1764)
c) $8861
d) ($1464)
2) Calculate the Ownership Operating Advantage in year 4.
a) 8861
b) ($939)
c) ($1764)
d) ($1464)
Step by Step Solution
3.38 Rating (157 Votes )
There are 3 Steps involved in it
Step: 1
1 a Cost of buying car Purchasing cost 28000 at rate of interest 499 ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
Document Format ( 2 attachments)
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