Reference no: EM13140561
Financing or Leasing a New Car. "New Dodge Ram 2500 4x4 Quad Cab:
Cash price $48,000." Suppose that Chrysler is also offering to provide 0% ?nancing for 48 months. Alternatively, you can lease the same vehicle for $600 per month for 48 months with $5,000 down. You have the $48,000 required and if you don't spend it on the truck, you can invest it in a GIC at 4%. The going rate for car loans is 8%.
(a) What is the monthly payment if you ?nance the car over 4 years at the following interest rates: 0%, 4%, and 8%?
(b) If you have the $48,000, what is the relevant interest rate? If you don't have the $48,000 but have to borrow it? If 4% is the cost of your
capital, what is the cost of the truck if you use Chrysler's ?nancing option? If 8% is the cost of your capital, what is the cost of the truck if you use Chrysler's ?nancing option?
(c) Given Chrysler's ?nancing option, which option (buying or leasing) is preferred? Why does it depend on the residual value of the truck when
the lease expires? Explain.
(d) Suppose that Chrysler terminates the ?nancing option. How high could it raise the lease payment to keep you indifferent between buying and leasing?
|
What is the limiting reactant
: Hydrogen is produced when methane(CH4) reacts with water. The other product is CO2. Using 80.0g of methane and 16.3g of water, how many liters of H2 can be produced at STP? what is the limiting reactant?
|
|
Why are some fruits sweet and some sour
: Why are some fruits sweet and some sour, whereas others have no specific taste? How does the ripening of fruit affect the process of seed dispersal?
|
|
Journalize entry to record transactions of oliver company
: Journalize the entry to record the following selected transactions of Oliver Co. Purchased $10,000 of Kruse Co. 8% bonds at 102 plus accrued interest of $2,000.
|
|
Trade-in allowance on the purchase
: The old used truck cost $4,800 and on March 31, the end of the quarter, had depreciated $3,180 straight-line depreciation on the old truck is $80 per month. The new truck listed for $ 18,950 and wumbaugh Auto Sales allowed a $2,825 trade-in allowa..
|
|
How high could it raise the lease payment
: What is the monthly payment if you ?nance the car over 4 years at the following interest rates: 0%, 4%, and 8%?
|
|
Analysis garden state.
: Analysis Garden State.
|
|
What number of grams of silver can be produced
: In the reaction Cu(s) + 2AgNO3(aq) --> 2Ag(s) + Cu(NO3)2(aq), what number of grams of silver can be produced from 49.1 g of copper?
|
|
Vital information about rc series circuit
: Important information about RC Series Circuit, An RC series circuit has a voltage source of 10Vac, a resistor of 10ohms, and a capacitor with an impedance of -j10ohms
|
|
Find minimum sample size needed to be confident
: What is the minimum sample size needed in order for you to be confident that your estimate is within 5 of ? Use the value for the population standard deviation of scores on this subsection.
|