Lease payment in the standard lease

Assignment Help Business Economics
Reference no: EM13770158

A local car dealer is advertising a standard 24-month lease of $1,150 per month for its sports car. The standard lease requires a down payment of $4,500, plus a $1,000 refundable initial deposit now. The first lease payment is due at the end of month 1. In addition, the company offers a 24-month lease plan that has a single up-front payment of $30,500, plus a refundable initial deposit of $1,000. Under both options, the initial deposit will be refunded at the end of month 24. Assume an interest rate of 6% per year compounded monthly. With present-worth criterion, which option is preferred? (Answers: PW for the Standard Lease = -$30,560, PW for the Up-front Payment Lease = -$30,613, Select the Standard Lease.)

Note that the first lease payment in the Standard Lease is defined as occurring at the end of the first month.

Reference no: EM13770158

Questions Cloud

What is public saving equal to in this economy : Consider a closed economy in which GDP equals $15 billion, consumption equals $9 billion, government purchases equal $2 billion, and tax revenue equals $1 billion.  What is investment equal to in this economy? What is national saving equal to in this..
Provide theoretical support where needed : List changes in bulleted format. Provide theoretical support where needed
Describe and compare four traditional approaches : Failure to differentiate or integrate or both may result in poorly designed jobs, which may lead to performance problems. In contrast, well-designed jobs improve productivity and enhance employee satisfaction. Four approaches to job design developed ..
What will be the market price of these bonds : What is the par value today and what will it be three years from today -  Write down the current prime rate, 15-year mortgage rate, the 3 month T-Bill rate and the 5-year T-Bond rate (for the USA). Are you surprised?
Lease payment in the standard lease : A local car dealer is advertising a standard 24-month lease of $1,150 per month for its sports car. The standard lease requires a down payment of $4,500, plus a $1,000 refundable initial deposit now. The first lease payment is due at the end of month..
Estimate the various areas of the criminal justice system : Compare and evaluate the various areas of the criminal justice system and security by addressing the following: The objectives of and the challenges facing various federal, state, and local law enforcement agencies
What is the future worth-bank account : Suppose that $2,000 is placed in a bank account at the end of each quarter over the next 15 years with the first deposit made 3 month from today. What is the future worth at the end of 15 years when the interest rate is 6% per year compounded quarter..
Laws relating to search and seizure : Debate the following areas in your analysis: Laws relating to search and seizure, Laws relating to surveillance by police, Laws relating to surveillance by school officials
What is nominal annual interest rate for this credit card : A department store has offered you a credit card that charges interest at 1.05% per month, compounded monthly. What is the nominal annual interest rate (APR) for this credit card? What is the effective annual interest rate?

Reviews

Write a Review

Business Economics Questions & Answers

  Discuss how labour productivity-living standard are related

Discuss how labour productivity and living standard are related. Examine how property rights affect a nation’s standard of living. Suppose the government grants a tax concession on companies’ investments in order to encourage private investment. Exam..

  Elucidate impact the nation production possibilities curve

Find U.S. civilian employment date for the last 10 years. How many more workers were there at the end of the last 10 years than at the beginning. Elucidate how did this impact the nation's production possibilities curve.

  Racial also ethnic groups

Racial also Ethnic Groups defines culture of poverty as a way of life which involves no future planning, no enduring commitment to marriage

  Illustrate what mistakes did policymakers make

Illustrate what mistakes did policymakers make that have kept developing nations from growing more quickly.

  What is expected payoff to at&ts decision

If the probability of Verizon not advertising even though AT&T does not is 10 percent, what is expected payoff to AT&Ts decision to not to advertise?

  What might cause money velocity to change like this

What would happen if real GDP growth fell to 2% per year? (f) Again go back to the baseline case; what happens to inflation if money velocity rises at 1% per year. What might cause money velocity to change like this?

  Quse the classical is-lm model for two countries to analyze

q.use the classical is-lm model for two countries to analyze the idea that the united states became a relatively more

  Qa construction company is bidding on a project comprising

q.a construction company is bidding on a project comprising five high-rise buildings to be erected one after the other.

  Q1 the sales tax rate applied to all purchases within a

q1. the sales tax rate applied to all purchases within a state was 0.04 4 percent throughout 2006 however increased to

  Qjp morgan chase and co1 give a brief overview of your

q.jp morgan chase and co1. give a brief overview of your company the business it is in and its financial performance.2.

  Illustrate what is price elasticity of demand for cd players

Suppose the store manager observes that the quantity demanded increases from 700 CD players to 1,300 CD players. Illustrate what is the price elasticity of demand for CD players.

  What makes this company a success or failure

What are the characteristics that make Irelands international company different from domestic companies? Is this company successful? What makes this company a success or failure?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd