Calculate the ownership operating advantage

Assignment Help Finance Basics
Reference no: EM133000337

There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month. The car will need maintenance in the 3rd year worth $525 and $825 in the 4th year. The car will have 35% residual value in the 5th year. Sales tax on new car is 6% and required rate of return is 5%.

Calculate the Ownership Operating Advantage in year 1.

Reference no: EM133000337

Questions Cloud

Compute net realizable value of accounts receivable : Determine the net realizable value of the accounts receivable as at 31 Dec. Wrote off the following accounts as bad debt: Bintan Trading
Principal source of capital for canadian corporations : What is the principal source of capital for Canadian corporations?
Calculate the unlevered npv of investment : Your client, a real estate company, is evaluating a real estate project of $15,000,000 that will provide them with yearly NOI of $1,950,000 for the next 10 year
Describe the netting process : Describe the netting process. $5,000 loss from the sale of shares of Big Box, Inc. that he bought in February 2013 and sold on the last day of the year
Calculate the ownership operating advantage : There is a choice to buy a car worth $28,000 with 100% financing at 4.99% APR for 60 month or lease at $450 per month. The car will need maintenance in the 3rd
How much gain does the beneficiary have to recognize : The land had a fair market value of $150,000. The beneficiary of the land sells the land for $160,000. How much gain does the beneficiary have to recognize?
What is the implied share price of abc : If you believe the reasonable price to tangible book value should be $1.3 for this company, what is the implied share price of ABC?
Benefits and disadvantages of approach : You are an analyst that assists in the management of an open-ended unit trust vehicle. Explain what sort of precautions you could take to deal with liquidity is
What advice should give morgan regarding the amount : What advice should you give Morgan regarding the amount of interest income Morgan must recognize in the first year of the installment sale?

Reviews

Write a Review

Finance Basics Questions & Answers

  Net profit for optimix for next year

You have been told that Optimix's sales next year will be $12,000,000 and that the breakeven point will be $8,000,000. Gross margin will be the same.

  Fully diversified portfolio

At least theoretically the "fully diversified portfolio" would have no remaining non-systematic risk (or, at least, it would be holding only systematic risk)

  Seven years ago goodwynn amp wolf incorporated sold a

seven years ago goodwynn amp wolf incorporated sold a 20-year bond issue with a 14 annual coupon rate and a 9 call

  Understanding of the risks involved

On Tuesday, the investor determines that due to a better understanding of the risks involved, he would have liked a yield 1⁄2 percent higher than what was implied by his Monday investment. How much market value loss does the investor calculate as ..

  What are the convexities of the 2 portfolios

What are the convexities of the 2 portfolios? To what extent does (a) duration and (b) convexity explain the difference between the percentage changes calculated in part c?

  What is the npv of the project

A project that will provde annual cash flows of $2,350 for nine years costs $9,700 today. a.At a required return of 12 percent, what is the NPV of the project?

  Explainan industry is defined as a collection of firms that

1.an industry is defined asa.a collection of firms that compete with one another in a single product market.b.a

  Discuss the disadvantages of the method you choose

Payback ,discounted pay back ,NPV, IRR, MIRR which method is the best for evaluating a projects contribution to firm value. In a paragraph explain your answer.

  Average annual rate of return on investment

Seven years ago, Stan purchased 10 shares of an aggressive growth mutual fund at $90 a share, for a total of $900. Today he sold all 10 shares for $4,500. What was his average annual rate of return on this investment, before tax?

  Determine what was the consideration

Citynet, LLC, established an employee incentive plan "to enable the Company to attract and retain experienced individuals."

  What is the likely differential incidence of substituting

What is the likely differential incidence of substituting a payroll tax for an equal-yield corporate income tax?

  Understand the reasons for changes in price

In an efficient market we can always understand why prices are at the level they happen to be or always understand the reasons for changes in price?

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