A car lease is a financial asset.In a standard car lease, the lessee/buyer makes an upfront payment or depositwhen they sign the lease and take the car (this is typically buried in the fine print (8 pt font)of the advertisement, whereas the seemingly low monthly payment will be prominently displayed).Then each month they make a fixed lease payment at the beginningof the month.At the end of the lease term, they have the option of returning the car (with potential payment adjustments for excess milage or wear-and-tear) or purchase the car for a previously agreed buyout price.Alternatively, the buyer could buy the car ("Sticker Price")in the beginning for cash or arrange a loan.

Assume you are the Director of Finance at a car dealership.Calculate the upfront payment/depositfor a car lease that provides the required lease return % (aka WACC) that would make the dealer indifferentbetween a) leasing and having the lessee buy the car at the end of the term or b) selling for cash up front, using the following assumptions:

Sticker Price 24,999

Lease Term (mo) 24

Monthly Payment 299

Required Lease Ret % 7.0%

End of Lease BuyoutPrice 17,999

Deposit