Determining the market interest rates

Assignment Help Finance Basics
Reference no: EM133115240

You are offered two options by the Waverley Toyata dealer for purchasing a Toyota landcruiser 4WD

Option 1: upfront where you pay $100,000 now

Option 2: 2-year monthly payment plan of $4500/month, starting today, with a final payment to be made 23 months from today1) Assume that you have chosen option 2 to purchase the car. Immediately after the 12th monthly payment, you encounter some temporary financial difficulty and are only able to afford monthly payment of $4000. After negotiating with the dealer, they are happy for you to pay $4000 per month for the rest of the contract and a final lump sum payment right at the end of the contract. if the market interest rates rate is still 6% p.a., how much would this final lump sum payment be so that you will not be worse off by this new arrangement? (Do Not use Excel)

Reference no: EM133115240

Questions Cloud

Imply working capital or net working capital : When you include the current liabilities in a short-term financial decision, does that imply working capital or net working capital? Explain.
Define logistics and why logistics management is important : Define logistics and explain why logistics management is important. How does logistics management apply to your organization?
Coupon rate of the bond-mewah enteprise : Mewah Enteprise has bond on the market making annual payments with 13 years to maturity and selling for RM1045. At this price the bonds yield is 7.5%.
Calculate the NPV for both projects : Question - The following are the cash flows of two projects - Calculate the NPV for both projects if the discount rate is 12%
Determining the market interest rates : You are offered two options by the Waverley Toyata dealer for purchasing a Toyota landcruiser 4WD
Australia-based mnc stock performance : Review annual reports and news about each of your Australia-based MNCs to determine where they do most of their business and the foreign currency to which they
Currency forward contracts and currency futures contracts : It is 12th January and the following information is available for Euro (€) currency futures prices (contract size € 62,500): March £ 0.6871/€ June £ 0.6915/€ Se
Animal rescue annual adoption event : Throughout this course, you have been working with a hypothetical project for the Lucky Me Animal Rescue's annual adoption event.
What is the present value of a security : What is the present value of a security that promises to pay you $5,000 in 20 years? Assume that you earn 7% compounded semi-annually

Reviews

Write a Review

Finance Basics Questions & Answers

  What is pw of fuel cost for heating unit over a given period

A gas-fired heating unit is expected to meet an annual demand for thermal energy of 500 million Btu, and the unit is 80% efficient.

  Franchise payback period-net present value

Calculate each franchise's payback period, net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR).

  Prepare a double-spaced two-page industry report

prepare a double-spaced two-page industry report summarizing the key ethical issues in the banking and finance

  Good substitute for the chips

Consider the following scenario: You have been awarded a contract to analyze sales data for a snack food company. They have introduced a new flavor

  Required rate of return on equity

Explain why and how a change in interest rates on other financial assets will affect the required rate of return on equity?

  What is the minimum amount of cash

At the end of the trade, what is the minimum amount of cash that should be in your account?

  What is the expected npv of department

Suppose that the merger is successful. But suppose (and this is a hypothetical that is not true) that Berkshire Hathaway is considering the shutdown of PCC's mi

  An expansion project being considered by your firm has an

nbspan expansion project being considered by your firm has an initial cost of 1250000 and expected net cash flows of

  Currency carry trade to breakeven

What spot rate prevailing in one year is needed to for the currency carry trade to be profitable.

  The discount rate decreases

5. You have estimated the value of a planned project by finding the present value (PV) of all the cash flows from that project. Which of the following would cause the project to look more appealing (have a greater net value)? a. the discount rate de..

  How much should the son pay for the farmland

A father wants to pass some farmland to his son but he needs to know what the farm is worth. According to the historical cash flows.

  How have money market rates changes

How have money market rates changes since the beginning of the year?

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