Homework Help!
The list price of a basic Honda CRV is$25,000, and you are considering whether you should buy or lease the car. The Table below shows a breakdown of the costs for each option. Please perform a Present Value calculation comparing the cost of buying versus leasing the Honda CRV, and state which option has the lower cost given the data provided. When you purchase the vehicle, you are responsible for any maintenance costs (e.g., oil changes, repairs). but the dealer takes care of the expenses for a leased vehicle. Assume that the term of your lease is 5 years (60 months), and use an annual loan discount rate of 6% in the calculations you use to make your decision. When performing your calculations, please pay attention to the time frame since some payments are annual and others are monthly. Buy $3.000 $22,000 Lease (60 month lease) $3.000 $213 Honda CRV ($25,000 sales price) Down Payment Loan Amount Monthly Payment Annual Maintenance Cost Resale Value in year 5) Present Value of the Buy or Lease Option $300 $14,750 ? ? Show your calculations, and summarize your results in the Table below. Table I: Present Value Results Honda CRV ($25,000 sales price) Buy Lease (60 month lease) Present Value Down Payment Present Value Loan Amount Present Value Monthly Payment Present Value Maintenance Cost Present Value Resale Value in year 5) Present Value of the Buy or Lease ? Option The list price of a basic Honda CRV is$25,000, and you are considering whether you should buy or lease the car. The Table below shows a breakdown of the costs for each option. Please perform a Present Value calculation comparing the cost of buying versus leasing the Honda CRV, and state which option has the lower cost given the data provided. When you purchase the vehicle, you are responsible for any maintenance costs (e.g., oil changes, repairs). but the dealer takes care of the expenses for a leased vehicle. Assume that the term of your lease is 5 years (60 months), and use an annual loan discount rate of 6% in the calculations you use to make your decision. When performing your calculations, please pay attention to the time frame since some payments are annual and others are monthly. Buy $3.000 $22,000 Lease (60 month lease) $3.000 $213 Honda CRV ($25,000 sales price) Down Payment Loan Amount Monthly Payment Annual Maintenance Cost Resale Value in year 5) Present Value of the Buy or Lease Option $300 $14,750 ? ? Show your calculations, and summarize your results in the Table below. Table I: Present Value Results Honda CRV ($25,000 sales price) Buy Lease (60 month lease) Present Value Down Payment Present Value Loan Amount Present Value Monthly Payment Present Value Maintenance Cost Present Value Resale Value in year 5) Present Value of the Buy or Lease ? Option
