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Please help me on this one.. Thanks Ajit 1. LEASE FACTS: Down Payment Lease Term Lease Payments Buy Out Price - End of Lease Market
Please help me on this one.. Thanks Ajit
1. LEASE FACTS: Down Payment Lease Term Lease Payments Buy Out Price - End of Lease Market Loan Rate Sales Tax Title Fee Your Highes Credit Card Rate Outright Purchase of Car (Before tax and title) $ 1,500.00 Months 36 $ Per 189.00 Month $ 12,000.0 0 8% 6.75% $ 15.00 15.00% $17,000.00 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 . 18,22 9 B . 20,98 7 C . 17,36 5 D. 10,50 0 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: 17,00 4 20,09 0 19,07 6 18,16 3 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 . 18,08 9 B . 17,09 1 C . 17,00 4 D. 19,00 0 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 . 19,04 5 B . 17,90 0 C . 23,76 7 D. 28,29 9 Please show your work by submitting a Word, ExcelStep by Step Solution
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