The market value of car isexpected to depreciate 48 in

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You are planning to acquire a new carwith a negotiated purchase price of $50,000. Youprefer to turn your cars over after 4 years. You have two financing choices: lease or borrow & buy. You can obtain a four-year loan at 6% annual rate (which means 0.5% monthly rate)for the entire purchase price of the car. A four-year lease (equal monthly lease paymentsstart immediately) requires a down payment of $4,000. The market value of the car is expected to depreciate 48% in four years. What is the break-even lease payment? Assume taxes are irrelevant to this problem.

Reference no: EM13478706

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