a. John Walters is comparing the cost of credit to the cash price of an item. If John makes a down payment of $65 and pays $35 a month for 24 months, how much more will that amount be than the cash price of $687?

b. A service contract for a video projection system costs $160 a year. You expect to use the system for four years. Instead of buying the service contract, what would be the future value of these annual amounts after four years if you earn 4 percent on your savings? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

c. What would be the net present value of a microwave oven that costs $167 and will save you $76 a year in time and food away from home? Assume an average return on your savings of 5 percent for 5 years. (Hint: Calculate the present value of the annual savings, then subtract the cost of the microwave.) Use Exhibit 1-D. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

d. Use the following data:

Down payment (to finance vehicle)	$	7,400		Down payment for lease	$	2,900
Monthly loan payment	$	1,040		Monthly lease payment	$	780
Length of loan		48	months	Length of lease		48	months
Value of vehicle at end of loan	$	14,000		End-of-lease charges	$	1,450

What is the total cash outflow for buying and for leasing a motor vehicle with a cash price of $43,500?

Total Cashflow: Buying:_______ Leasing:________

Exhibits:

Exhibit 1-B Future Value (Compounded Sum) of $1 Paid In at the End of Each Period for a Given Number of Time Periods (an Annuity Period 1% 7214 6.308 5309 4.246 3.153 20601.000 8.286 2.010 2.020 4.375 5.204 7.716 10.637 12.488 14.487 16.645 18.977 13.579 10.159 10 10.462 10.950 11.464 12.808 10 9,369 8,583 6,633 5,526 12.578 15.193 11.567 12.169 12.683 13.412 13.809 14.680 14.947 15.974 14.972 15.784 18.531 19.561 15.618 16.627 18.292 20.024 26.212 22.550 18.599 23.276 16 17.258 18.639 20.157 21.825 23.657 25.673 27.888 30.324 33.003 17 18.430 20.012 23.698 25.840 28.213 30.840 750 36.974 19.615 21.412 45.599 22.841 27.671 33.760 45.762 73.106 94.461 113.280 136.310 29.778 33.066 36.786 40.995 51.1 20 22.019 24.297 25 30 34.785 40.588 40 48.886 60.402 75.401 50 64.463 84.579 112.800 152.670 209.350 290.340 406.530 573.770 815.080 1,163.900 1,668.800 98.347 114.410 164.490 199.020 95.026 120.800 154.760 199.640 259.060 337.890 442.590 581.830 28.243 32.030 47.575 56.085 66.439 79.058 112.80 950, 66,439 54865 40,995 $1.446 41.301 40,545 39,'90 Period 12% 20% 25% 4779 3407 2140 1000 3.374 806610 8.75A 1141 14.773 19.0824701 32.150 1.000 2.200 3.813 6.187 1.000 2.190 3.640 5.766 9.043 1.000 2.180 3.606 5368 8.207 216 1.000 2.170 3.52 5.291 12 9 7.583 1.000 2.300 5.215 6 9.442 11.259 11.067 13.727 16.786 12.916 14.240 14.776 15.416 16.085 17.549 18.420 19.337 20.304 21.321 22.393 23.52 24.701 25.959 33.253 17.549 21.814 2121 2352 2 56.110712.939602 128120 273560 .170 21.814 23.045 2 0429.002 36.786A7.103 60965 79.850 105.93018.050483.970 24.349 24.133 25.650 27.271 29.002 32.089 34.352 27.200 42.219 48.497 54.841 66.261 86.949 72.035 109.690 87.442 138.110 87.068 96.022 105.930 173.640 93.406 103.740 115.270 128.120 218.050 273.560 127.910 167.290 218.470 285.010 34.883 40.417 32.393 37.280 42.753 46.672 50.980 55.717 48.884 53.739 59.118 65.075 55.750 61.725 68.394 75.836 63.440 72.052 80.947 91.025 102.440 115.380 130.030 146.630 165.420 186.690 342.950 630.170 37.581 47.580 98.603 110.290 123.410 138.170 154.740 20 25 133.330 155.620 181.870 212.790 249.210 292.110 342.600 402.040 471.980 1,054.800 2,348.800 30 241.330 293.200 356.790 434.750 530.310 647.440 790.950 966.700 1,181.900 3,227.200 8,730.000 40 767.090 1,013.700 1,342.000 1,779.100 2,360.800 3,134.500 4,163.210 5,529.800 7,343.900 30,089.000 120,393.000 50 2,400.000 3459.500 4,994.500 7,217.700 10,436.000 15,090.000 21,813.000 31,515.000 45,497.000 80,256.000 165,976.000 066.700 1,181.900 3,227.200 8,730.,000