Project 2 Show Your Work

LEASE FACTS:

Down Payment

$ 1,500.00

Lease Term

36

Months

Lease Payments

$ 189.00

Per Month

Buy Out Price - End of Lease

$ 12,000.00

Market Loan Rate

8%

Sales Tax

6.75%

Title Fee

$ 15.00

Lower than the example in the lecture but use this

Your Highes Credit Card Rate

15.00%

Outright Purchase of Car (Before tax and title)

$17,000.00

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 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.	-28,299