Question
There is a choice to buy a car worth $32,000 with 100% financing at 3.99% APR for 60 month or lease at $500 per month.
There is a choice to buy a car worth $32,000 with 100% financing at 3.99% APR for 60 month or lease at $500 per month. The car will need maintenance in the 3rd year worth $525 and $825 in the 4th year. The car will have 30% residual value in the 5th year. Sales tax on new car is 6% and required rate of return is 5%. Which option is better?
| Leasing since IRR is 3.79% | ||
| Leasing since IRR is 4.17% | ||
| Buying since IRR is 8.65% | ||
| Buying, since IRR is 9.29% |
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Research Methods And Audit For General Practice
Authors: David Armstrong, John Grace
3rd Edition
0192631918, 978-0192631916
