What is the monthly difference in cost between the two

Assignment Help Financial Management
Reference no: EM131306052

Using the calculator at www.mindyourfinances.com/calculators/lease-buy, determine whether it is better to lease or buy a vehicle. Assume the purchase price of the car is $30,000, you will make a $2,000 down payment, the sales tax rate in your state is 6%, and your investment rate of return is 10%.

The term of the loan will be 60 months with an interest rate of 7%, no other fees, and an annual depreciation rate of 20%. The term of the lease will be 24 months with an interest rate of 7%, other fees totaling $150, a residual percentage of 50%, and a security deposit of $1,000.

Based strictly on the monthly payments, is it better to buy or lease? What is the monthly difference in cost between the two?

Reference no: EM131306052

Questions Cloud

What will be the total amount that you will pay : Assume you purchase an automobile requiring a $30,000 loan at 7% for 48 months. What will be the monthly payment? What will be the total amount that you will pay over the 48 months?
Explain the influence of altruistic organizations on health : Describe the factors that impact health and health care delivery in the global areas most affected by the topic you selected. These factors may include not only culture and tradition, but also politics, economics, and social attitude.
What complications will be faced regarding communicating : What complications will be faced regarding working and communicating with an ethnically diverse population? What complications will be faced regarding working and communicating with military personnel, aircraft, and ships? Explain.
Total quality management as a component : Total Quality Management is a way for the company to improve its sustainability, reduce production time, lower costs, and increase product demand. You have now completed two rounds of the simulation with Total Quality Management as a component.
What is the monthly difference in cost between the two : Based strictly on the monthly payments, is it better to buy or lease? What is the monthly difference in cost between the two?
Find the complexity of the distance vector''s algorithm : To find the complexity of the distance vector's algorithm, find the number of operations a node needs to do when it receives a vector from a neighbor.
Behavior toward financing the purchase of a car : Some students make decisions based on whether they can cover the monthly payment rather than what they need. Describe your own behavior toward financing the purchase of a car.
What is your opinion of the strategy : Some consumers might consider purchasing a new car (with a car loan), while using credit cards to cover other purchases, and making only the minimum required payment to the credit card company each month.- What is your opinion of this strategy?
Show how this good news is propagated : Show how this good news is propagated, and find the new distance vector for each node after stabilization.

Reviews

Write a Review

Financial Management Questions & Answers

  Intrinsic value of stock is greater than market value

If the intrinsic value of a stock is greater than its market value, then

  What is the company days sales in receivables

A company has net income of $185,000, a profit margin of 8.4 percent, and an accounts receivable balance of $124,370. Assuming 70 percent of sales are on credit, what is the company’s days’ sales in receivables?

  Estimate present value of the tax benefits from depreciation

Your company is considering a new project that will require $767,000 of new equipment at the start of the project. The equipment will have a depreciable life of 8 years and will be depreciated to a book value of $143,000 using straight-line depreciat..

  Find a country whose debt rating has recently changed

Link through the text Web site to the "Ratings" page of the Standard & Poor's Web site.  - Find a country or corporation whose debt rating has recently changed and explain why S&P made the change.

  What is the projected return on this stock

Over the past 15 years, the common stock of The Flower Shoppe has produced an arithmetic average return of 13.1 percent and a geometric average return of 12.8 percent. What is the projected return on this stock for the next five years according to Bl..

  Explain a reasonable strategy for bond investors

Suppose interest rates have been at historically high levels the past two years and you therefore expect they will soon go down. A reasonable strategy for bond investors during this time period would be to

  What is the cost of external equity

A company just paid a $2 per share dividend on its common stock(D0=$2.00). the dividend is expected to grow at a constant rate of 7 percent per year. the stock currently sells for $42 a share. if the company issues additional stock, it must pay its i..

  Annual effective interest rate remains

Pierre receives a thirty-year annuity paying $300(1.03)t + $100(1.02)2t + $70t − $60 at the beginning of the t-th year. Find the value of this annuity at the end of the tenth year if the annual effective interest rate remains 5% during the thirty yea..

  Enterprises originally sold bonds

Enterprises originally sold bonds in 2011 with a 15 year maturity, $1000 par, 6% coupon paying annual interest. It is now 2015 and 4 years later. Bonds of similar risk selling at par know have a 5% coupon rate. What price would bond investors be will..

  Sale securities and trading securities for year

On August 1, 2014, Dambro Company acquired 800, $1,000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2014, and mature on April 30, 2020, with interest paid each October 31 and April 30. Account for this bonds as Held to maturity ..

  What is the profitability index if the discount rate

Irwin Industries is currently considering a project that will produce cash inflows of $83,000 a year for two years followed by $74,000 a year for three more years. The cost of the project is $271,000. What is the profitability index if the discount r..

  The timing assumptions for your retirement planning

The following are the timing assumptions for your retirement planning: you will save with annual payments into a retirement savings account. The following are the investment and consumption assumptions for your retirement planning: your investments w..

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