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Hello, Please see attached assignment I would like help with. QUESTION 1 LEASE FACTS: Down Payment $ 1,500.00 Lease Term 36 Months Lease Payments $
Hello, Please see attached assignment I would like help with.
QUESTION 1 LEASE FACTS: Down Payment $ 1,500.00 Lease Term 36 Months Lease Payments $ 189.00 Buy Out Price - End of Lease $ 12,000.00 Market Loan Rate 8% Sales Tax 6.75% Title Fee $ Your Highes Credit Card Rate 15.00% Outright Purchase of Car (Before tax and title) Per Month $17,000.00 15.00 Assume that you can buy the vehicle for $17,000 before tax and title. The NPV of the car if you lease will be: A. -18,229 B. -20,987 C. -17,365 D. -10,500 QUESTION 2 Assume that you can buy the vehicle for $17,000 before tax and title. The NPV of the car if you buy it is: -17,004 -20,090 -19,076 -18,163 QUESTION 3 For the next two questions, assume that the lease and buy are both reasonable values and that you are paying a 15% interest rate (after tax) on credit card debt. You also plan to keep the vehicle beyond the lease term. In other words, you would exercise the purchase option at the end of the lease term. Assume further that you take advantage of the opportunity to pay off credit card debt with the monthly lease savings. What is the NPV of the lease? A. -18,089 B. -17,091 C. -17,004 D. -19,000 QUESTION 4 Assume further that you do not take advantage of the opportunity to pay off credit card debt with the monthly lease savings. What is the NPV of the lease? A. -19,045 B. -17,900 C. -23,767 D. -28,299Step by Step Solution
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