7a. A 48-month lease plan on a luxury car that costs $46,700 consists of a $2.875 down payment, monthly payments of $594.80, and a residual value of$28,400. A purchase plan for the car requires a down payment of $3,250 and a 4-year loan with monthly payments of $1,082.a. What is the total cost of leasing?b. What is the total cost of purchasing?c. Which plan gives the lowest total cost?d. What is the difference in the plans over four years?✪EDBO

Lease is defined a contractual agreement incorporated between two business entities where one entity…

Answered: 7a. A 48-month lease plan on a luxury…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Based on the following, calculate the costs of buying versus leasing a motor vehicle. Purchase Costs Leasing Costs Down payment: $1,500 Security deposit: $500 Loan payment: $450 for 48 months Lease payment: $450 for 36 months Estimated value at end of loan: $4,000 End-of-lease charges: $600 Opportunity cost interest rate: 4 percent
Use the following data: Purchase Costs Down payment: $4,800. Loan payment: $340 for 48 months Estimated value at end of loan: $5,100 Opportunity cost interest rate: 2 percent per year Calculate the costs of buying versus leasing a motor vehicle. Cost of buying Cost of leasing Leasing Costs Security deposit: $1,600 Lease payment: $340 for 48 months End-of-Lease charges: $765
Use the following data: Purchase Costs Down payment: $3,900 Loan payment: $370 for 48 months Estimated value at end of loan: $4,800 Opportunity cost interest rate: 4 percent Leasing Costs Security deposit: $1,300 Lease payment: $370 for 48 months End-of-lease charges: $720 Calculate the costs of buying versus leasing a motor vehicle. Cost of buying Cost of leasing
Compare the cost of the following leasing agreement with the finance charge on a loan for the same time period: The value of the car is $15,000 at the beginning of the lease period, and its projected residual value at the end of three years is $4,000. The lease requires a $500 down payment. Monthly payment $315 Acquisition fee $300 Disposition charge $150 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were equal to or less than?
Use the following data: Down payment (to finance vehicle) Monthly loan payment Length of loan Value of vehicle at end of loan . What is the total cost for buying and for leasing a motor vehicle with a cash price of $38,500? Buying Leasing Total Cost $6,600 $ $ 920 48 months. 12,400 Down payment for lease. Monthly lease payment. Length of lease End-of-lease charges $ 2,500 $ 700 48 months $1,250
44. Subject :- Accounting is it correct? To calculate the total cost of leasing a hybrid vehicle for 5 years, we need to consider the monthly lease payment and the down payment. Here's the breakdown: Lease Payment: Monthly Lease Payment: $80 Lease Term: 5 years (60 months) Total Lease Payments: $80/month * 60 months = $4,800 Down Payment: Down Payment: $3,000 Total Cost of Lease: Total Cost of Lease = Total Lease Payments + Down Payment Total Cost of Lease = $4,800 + $3,000
Question 5: What is the cheapest way to drive a Lincoln? You consider leasing a Lincoln for 24 months. Two payment options: you can either pay upfront $11,200 or choose 24 monthly installments of $539 [with first payment in a month of the lease date]. You can borrow/lend at 12% (monthly compounding) from a bank. Should you prepay the lease or take the installment plan? Use formula for sum of annuities. Think what is the per-period interest rate that applies here. Now assume that you can borrow/lend at 18% (monthly compounding) from a bank. Should you prepay the lease or take the installment plan?
Suppose you decide to obtain a 4-year lease for a car and negotiate a selling price of$28,990, including license fees. The trade-in value of your old car is $3850. If you makea down payment of $2400, the money factor is 0.0027, and the residual value is$15,000, find each of the following.a. The net capitalized costb. The average monthly finance chargec. The average monthly depreciationd. The monthly lease payment
Use the following data: Down payment (to finance vehicle) Monthly loan payment Length of loan. Value of vehicle at end of loan Buying Leasing $ 5,000 $ 700 48 months Buying O Leasing $ 9,200 Down payment for lease Monthly lease payment Length of lease End-of-lease charges b. Based on your answers in part a, would you recommend buying or leasing? $1,700 $ 540 $ a. What is the total cash outflow for buying and for leasing a motor vehicle with a cash price of $29,500? Total Cash Outflow 48 months 850
Purchase Costs Leasing Costs Down payment $ 1,900 Security deposit $ 1,040 Loan payment $ 550 for 36 months Lease payment $ 400 for 36 months Estimated value at end of loan $ 5,000 End of lease charges $ 900 Opportunity cost interest rate 5 percent Based on the costs listed in the table above, calculate the costs of buying and leasing a motor vehicle. (Round your answers to the nearest whole number.) Buying & Leasing Total purchase cost Total leasing cost
Compare the cost of the following leasing agreement with the finance charge on a loan for the same time period. The price of the car is $14,000, and its projected residual value at the end of four years is $3,000. Monthly payment $250 Capital cost reduction $1,000 Disposition charge $200 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were less than?
10. A furniture company allows customers to purchase household furnishings with an in-store loan, pay with cash or a credit card, or Rent-To-Own with a lease agreement. A customer chooses furniture worth $3,225.00 including tax and chooses to Rent-To-Own. Rent to Own Furniture Warehouse ● ● No down payment is required. The monthly lease payment is $156.99 for 2 years. a. Calculate the total cost to own the furniture using the Rent-To-Own option. b. What the amount of the finance charge on this purchase? Caza O OM3:TMB

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