Find the maximum amount to meet payment restriction

Assignment Help Corporate Finance

Reference no: EM1346160

You are considering the purchase of new car. You have negotiated with the salesperson at the dealership and you can purchase the vehicle for $30,000. You have $8,000 that you can use as a down payment.

Prior to going into the dealership, you have set an absolute limit of $375 for the amount of monthly payments that you can make on the car. You are willing to finance over five years but you cannot exceed the payment of $375 per month. The dealer is willing to offer you financing at an annual rate of 6.5% for a 5-year loan. The dealer is willing to offer 5.5% financing on a 4-year loan.

CalculatorWeb's loan calculator lets you specify any single item to calculate if the other four variables are specified. The value should be entered as whole numbers without commas.

1. Can you meet your payment restriction and finance the amount required for the car?

2. What is the maximum amount that you can borrow to meet your payment restriction if the loan is to be paid off in 5 years?

3. Suppose that you are limited to paying $375 per month but you want to pay the loan off in 4 years and not 5 years. What is the maximum amount that you can borrow?
What are the disadvantages of debt compared to equity?
What are the advantages of debt compared to equity?
A business invests in new plant and equipment to generate additional revenues and incomeâ?"the basis for its growth. How would a company pay for this investment?
Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires companies to classify equity and debt securities Into three categories. Please explain

Reference no: EM1346160

Questions Cloud

Providing financial earnings projections : Assume that Jimmy Cliff, a financial writer, recently stated that "there are substantial arguments for including receiving projections in yearly reports & the like.

Elucidate importance of credibility : Elucidate the importance of credibility when evaluating a firm's potential moves.

Technology changed the communication process : Technology changed the communication process - Explain how has technology changed the communication process?

Misunderstandings in communication : Find the role of the sender and receiver, such as manager, peer, subordinate, client, vendor, and so forth - What did you learn about the communication process from this activity?

Find the maximum amount to meet payment restriction : You are planning to buy of new car. You have negotiated with the salesperson at dealership & you can buy the vehicle for $30,000.

Define the maximum angle : A very long solenoid with a circular cross section and radius r= 8.1cm with n= 1.90E+4 turns/m has a magnetic energy density uB= 5.70 mJ/m3. What is the current in solenoid.

Explain what is nurd equilibrium level of income : Explain what is Nurd's equilibrium level of income. Explain what is likely to happen in the coming months if the government takes no action.

What is time interval between the events in reference frame : An 800-N man stands halfway up a 5 m long ladder of negligible weight. The base of the ladder is 3 m from the wall as shown. suppose that the wall-ladder contact is frictionless, wall pushes against the ladder with a force of what magnitude.

Discuss the overall goal of the financial manager : Determine the three forms of business organization, & explain the advantages and disadvantages of each form? For a corporation, discuss the overall goal of the financial manager?

User Account

All Pages