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Use the cost of $15,101 for the 2021 Toyota Rav4 Problem #1: Tony and Savannah would like you to help them address some of their
Use the cost of $15,101 for the 2021 Toyota Rav4 Problem #1: Tony and Savannah would like you to help them address some of their financial goals. They would like to know if Savannah should lease or buy (finance) her next car (2021 Toyota Rav 4). They try to change their car every 4 years. Assume 2% inflation. Additional Information: Finance Option: MSRP: $26,000 Interest Rate: 3% Down payment required: 30% Residual Value: Please use Kelley's Blue Book for approximate value of the car in 4 years. Lease Option: Monthly Lease payment: $189 Due at leasing: $2,999 1. How much do they have to pay monthly if they choose to finance? 2. What is the PV of the financing option? (Please show your calculation on excel) 3. What is the PV of the lease option? (Please show your calculation on excel) 4. Which option would you recommend based on your calculation? Why? 5. If they choose to change their car every 6 years, which option would you recommend based on your calculation? Explain
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