Question
There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month.
There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month. The car will need maintenance in the 3rd year worth $525 and $825 in the 4th year. The car will have 35% residual value in the 5th year. Sales tax on new car is 6% and required rate of return is 10%. Which option is better?
| Leasing since IRR is 9.29% | ||
| Buying, since IRR is 9.29% | ||
| Leasing since IRR is 3.65% | ||
| Buying since IRR is 3.65% |
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Technical Analysis The Complete Resource for Financial Market Technicians
Authors: Charles D. Kirkpatrick, Julie R. Dahlquist
1st edition
134137043, 134137049, 978-0131531130
