Refundable security deposit

Assignment Help Business Economics
Reference no: EM131003277

A local car dealer is advertising a 24-month lease of a sport utility vehicle for $520 payable at the beginning of each month. The lease requires a $2,500 down payment plus a $500 refundable security deposit that is refunded at the end of the 24 month lease. As an alternative, the company offers to finance the purchase with 24 end-of-the-month payments of $908.57 along with requiring a $2,500 down payment. You plan to sell the vehicle at the end of the 24 month period for $10,000. Assuming you have access to a deposit account that pays an interest rate of 6% APR compounded monthly, which option is more favorable?

Reference no: EM131003277

Questions Cloud

How many men left after five days from the start of the work : if the remaining work was completed by the remaining men in 18 1/3 days, how many men left after 5 days from the start of the work?
Discuss two international events involving the us military : Discuss two (2) international events involving the US military from the past five (5) years that can be traced back to a foreign policy created after the Civil War
Health risk associated with the plant''s continued operation : You are part of the Public Relations department for a major chemical manufacturer. Your main plant is located in an area that was entirely industrial when the plant was originally constructed in the late 1950s, but has recently been redeveloped to..
What was the original rate of interest : An amount of RS. 9800 is lent at a certain rate of interest. After 66 months, an additional amount of RS. 5700 is lent at a rate 3.5 times higher than the former. What was the original rate of interest?
Refundable security deposit : A local car dealer is advertising a 24-month lease of a sport utility vehicle for $520 payable at the beginning of each month. The lease requires a $2,500 down payment plus a $500 refundable security deposit that is refunded at the end of the 24 mont..
What is the apbo as it relates to will lawson : He will be fully eligible to retire with health care benefits in 15 years but is expected to retire in 25 years. What is the APBO as it relates to Will Lawson?
Find the amount of the companys annual payment : A company is considering buying workstation computers to support its engineering staff. In today's dollars, it is estimated that the maintenance costs for the computers (paid at the end of each year) will be $50,000, $60,000, $64,000 $70,000, and $80..
Why does the firms supply curve slope up in the long run : Why does the firm’s supply curve slope up in the long run (i.e. what assumption is employed to argue that the supply curve slopes up in the long run)?
How many gallons of gasoline are sold in the market : The Hull Petroleum Company and Inverted V are retail gasoline franchises that compete in a local market to sell gasoline to consumers. Hull and Inverted V are located across the street from each other and can observe the prices posted on each other’s..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Postmerger herfindahl-hirschman index increase

Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman inde..

  Increased cash flow should take care of profits

The sales manager of a retail outlet suggests that the best way to increase the number of customers is to have a sale. If a 10 percent price cut doesn’t bring in enough customers, then he’ll cut prices 20 percent. Increased cash flow should take care..

  Evaluate the economic desirability of collusive pricing

Why might price collusion occur in oligopolistic companies. Evaluate the economic desirability of collusive pricing.

  Most labor economists believe that the supply of labor

Most labor economists believe that the supply of labor is..

  A recent study determined the elasticities

A recent study determined the following elasticities for Volkswagen Beetles:

  Deposit in savings account

Linda made a deposit of $400 in her savings account 5 years ago. in the first year her account was earning 6%, but she did not deposit any money. in the second year her interest increased to 8%, when linda knew about the increase she deposited C amou..

  Describes the inflation-unemployment trade off

Which of the following describes the inflation-unemployment trade off?

  Two sectors exhibiting constant returns to scale technology

Consider again the case analyzed in class with two sectors exhibiting constant returns to scale technology (sector A is capital intensive and sector T is labor intensive). Suppose there is a neutral technological change in sector T only (no technolog..

  The associated projected economic gains from free trade

"The theory of comparative advantage (and the associated projected economic gains from free trade) is a well-known economic theory, but what happens in the real world is closer to the opposite. If, as the result of free trade, some American workers l..

  Economics has a notoriously bad reputation

Economics has a notoriously bad reputation among students. They assume it will be dry, boring, and not relevant to their lives. They also think it's hard because the course content must be understood rather than memorized. Why do you think economics ..

  Cause an accountants estimate of total costs

A key difference between accountants and economists is their different treatment of the cost of capital. Does this cause an accountant’s estimate of total costs to be higher or lower than an economists estimate? Explain.

  To make your work easier to grade

To make your work easier to grade, please make Julie the row player, Kristin the column player also Larissa the page player.

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