Leasing the car Down payment Interest from List Price Additional purchase costs Termin months Monthly payments (without HST) A) (6) (c) D) (6) $3,000.00 5.10% $25,300.00 $1,532.00 48 {G} $290.00 (beginning-of-month Mini-Case Amandeep, a graduate of Cambrian College's Business Program, found a job as an online marketing specialist for Tangerine Bank. Within a year, he saved [A] and decided to buy a new car but was not quite sure if he should lease it or buy it through financing from the bank. Assume a rate of interest of (B) compounded annually for both options. Lease payments are subject to HST (Harmonized Sales Tax). Taxes should not be added to the list price or net price of the vehicle for the lease option, only to the payment. Additional purchase costs include freight & Pol, Air Conditioner Tax, Tire Tax, and registration fees. a. A salesperson at the car dealership gave Amandeep the following table illustrating the comparison of the lease vs, finance options for the vehicle he liked. Copy the table into your notes and fill in each cell. Some cells will require a calculation using your Ball plus calculator, sone will be copied directly from your data set. Don't forget to show your work where possible. Leasing the car Financing the car Down Payment irae" ) $12,500.00 Financing the car Down payment Interest compounded and List Price Additional purchase costs Term in months AAD2 (A) (B) (c) (E) $3.000.00 5.10% $25,300.00 $1,762.00 Interest Rate paded List Price 100% Additional purchase casts TIX HST Net Price Termin menthe BINTI [END] Monthly payments Residual payment to own b. Draw a detailed timeline for the lease option. Be sure to include the residual value (with HST) at the end of the last payment interval, the net price, and the after-tax payments at equal payment intervals. c. Which option would be most economical for Amandeep? Show all calculations and provided a detailed explanation with your answer. Hint: Compare NPVs d. What should the residual payment be (including taxes) in order to make both options equal? e. Which option would be most economical if the residual value was $20,000 (including HST) for the lease option Provide justification for your answer. Leasing the car Down payment Interest from List Price Additional purchase costs Termin months Monthly payments (without HST) A) (6) (c) D) (6) $3,000.00 5.10% $25,300.00 $1,532.00 48 {G} $290.00 (beginning-of-month Mini-Case Amandeep, a graduate of Cambrian College's Business Program, found a job as an online marketing specialist for Tangerine Bank. Within a year, he saved [A] and decided to buy a new car but was not quite sure if he should lease it or buy it through financing from the bank. Assume a rate of interest of (B) compounded annually for both options. Lease payments are subject to HST (Harmonized Sales Tax). Taxes should not be added to the list price or net price of the vehicle for the lease option, only to the payment. Additional purchase costs include freight & Pol, Air Conditioner Tax, Tire Tax, and registration fees. a. A salesperson at the car dealership gave Amandeep the following table illustrating the comparison of the lease vs, finance options for the vehicle he liked. Copy the table into your notes and fill in each cell. Some cells will require a calculation using your Ball plus calculator, sone will be copied directly from your data set. Don't forget to show your work where possible. Leasing the car Financing the car Down Payment irae" ) $12,500.00 Financing the car Down payment Interest compounded and List Price Additional purchase costs Term in months AAD2 (A) (B) (c) (E) $3.000.00 5.10% $25,300.00 $1,762.00 Interest Rate paded List Price 100% Additional purchase casts TIX HST Net Price Termin menthe BINTI [END] Monthly payments Residual payment to own b. Draw a detailed timeline for the lease option. Be sure to include the residual value (with HST) at the end of the last payment interval, the net price, and the after-tax payments at equal payment intervals. c. Which option would be most economical for Amandeep? Show all calculations and provided a detailed explanation with your answer. Hint: Compare NPVs d. What should the residual payment be (including taxes) in order to make both options equal? e. Which option would be most economical if the residual value was $20,000 (including HST) for the lease option Provide justification for your
