What are some basic purchasing guidelines

Assignment Help Finance Basics

Reference no: EM131928286

Question: The Newtons New Car Decision: Lease versus Purchase

Farrah and Same Newton, a dual-income couple in their late 20s, want to replace their seven-year-old car, which has 90,000 miles on it and needs some expensive repairs. After reviewing their budget, the Newtons conclude that they can afford auto payments of not more than $350 per month and a down payment of $2,000. They enthusiastically decide to visit a local dealer after reading its newspaper ad offering a closed-end lease on a new car for a monthly payment of $245. After visiting with the dealer, test-driving the car, and discussing the lease terms with the salesperson, they remain excited about leasing the car but decide to wait until the following day to finalize the deal. Later that day, the Newtons begin to question their approach to the new car acquisition process and decide to reevaluate their decision carefully.

1. What are some basic purchasing guidelines that the Newtons should consider when choosing which new car to buy or lease? How can they find the information they need?

2. How would you advise the Newtons to research the lease-versus-purchase decision before visiting the dealer? What are the advantages and disadvantages of each alternative?

Reference no: EM131928286

Questions Cloud

What is the value of abc following the merger : ABC believes it can create $58473 of synergy if it acquires XYZ for $293011 in cash. Assume both firms are all-equity financed.

Compute the monthly break-even point for the new toy : Compute the monthly break-even point for new toy in unit sales and in dollar sales. How many units must sold each month to make a monthly profit of $10,962?

Advantages of paying managers percentage of profit : What are the advantages of paying managers a percentage of the profit, and what agency costs or problems are avoided in this kind is salary arrangement?

Calculate the rate of return represented by the cash flow : Calculate the rate of return (ROI) represented by this cash flow to three significant figures. If you were offered an additional $2,000 at the end.

What are some basic purchasing guidelines : What are some basic purchasing guidelines that the Newtons should consider when choosing which new car to buy or lease? How can they find the information.

Earnings per share and on the price of stocks : Net income for the coming year is expected to be 6, 900, 000. what impact will a three for one stock split have on the earnings per share and on the price.

How much can nelson short-term debt increase without pushing : How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.3? Round your answer to the nearest cent.

Achieve a turnover comparable to the industry average : What would the reduction in inventory if this firm were to achieve a turnover comparable to the industry average?

Calculate total prevention costs : The expected sales for Johnson Company is $50 million for the current year. Calculate total prevention costs

User Account

All Pages