a7 Mckoy Leasing leased a car to a customer. Mckoy will receive $225 a month, at the end of each month, for 72 months. Use the PV function in Excel® to calculate the answers to the followingquestions1. What is the present value of the lease if the annual interest rate in the lease is 6%?2.What is the present value of the lease if the car can likely be sold for $5,500 at the end of six years?1. What is the present value of the lease if the annual interest rate in the lease is 6%? (Do not round intermediary computations, but round your final answer to the nearest cent.)The present value of the lease is $. 13,576.392. What is the present value of the lease if the car can likely be sold for $5,500 at the end of six years? (Do not round intermediary computations, but round your final answer to the nearest cent.)The present value of the lease is

Step 1: the calculation of the Present value AB1Monthly receipt $ 225.00 2Years (72…

Answered: Mckoy Leasing leased a car to a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

McGee Leasing leased a car to a customer. McGee will receive $300 a month,at the end of each month, for 36 months. Use the PV function in Excel® to calculate the asnwers to the following questions1. What is the present value of the lease if the annual interest rate in the lease is 18%?2. What is the present value of the lease if the car can likely be sold for $6,000 at the end ofthree years?
A car can be purchased by paying $27 000 now or can be leased by paying $725 per month for the next four years, with the first payment due on the day of signing lease. What nominal rate of interest is charged on the lease?
You are interested in leasing a new car for 36 months. • The value of the car is $22,555. • You must pay $3025 at signing, which does not include the first month’s lease payment. • The monthly lease cost for the car is $154 for 36 months. • At the end of the lease, you will need to pay a lease termination fee of $2000. • The interest rate for this type of new car is 1.90% APR. Calculate the present worth of leasing the car.
Keith secured a lease on a machine by paying $1,900 as a down payment and then $600 at the beginning of every month for 5 years. The lease rate was 3.75% compounded monthly. a. What was the principal amount of the lease? $0.00 Round to the nearest cent b. What was the cost of the machine? $0.00 Round to the nearest cent c. What was the amount of interest paid over the term of the lease? $0.00 Round to the nearest cent
Kyle secured a lease on a machine by paying $2,000 as a down payment and then $700 at the beginning of every month for 5 years. The lease rate was 5.75% compounded monthly. a. What was the principal amount of the lease? Round to the nearest cent b. What was the cost of the machine? Round to the nearest cent c. What was the amount of interest paid over the term of the lease? Round to the nearest cent
You are interested in leasing a car for $425 per month, due at the beginning of each month. Using an interest rate of 4% annually, what is the present worth of a one-year lease for this car?
Your car dealer is willing to lease you a new car for $190 a month for 36 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 5.2 percent, what is the current value of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a car can be purchased by paying $27000 now or can be leased by paying $725/month for the next four years with the first payment due on the day of signing the lease. What nominal rate of interest is charged on the lease
Your car dealer is willing to lease you a new car for $399 a month for 48 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 3 percent, what is the current value of the lease?
You end up leasing $18,842.36 for 4 years. Your down payment was $1,455. The interest rate is 1.32% compounded monthly. The lease payment is monthly and due at the beginning of the month. After 4 years, there is residual owing on a leased vehicle. You have the option of returning the vehicle after a lease term or buying it out. Assume you choose to purchase the vehicle after the lease term and have saved for this opportunity. You pay the $12,317 residual plus tax at 12%. What is the total amount you have paid to own this car?
An office equipment representative has a machine for sale or lease. Ifyou buy the machine, the cost is $7,590. If you lease the machine, youwill have to sign a noncancelable lease and make 5 payments of $2,000each. The first payment will be paid on the first day of the lease. At thetime of the last payment, you will receive title to the machine. Thepresent value of an ordinary annuity of $1 is as attached: The interest rate implicit in this lease is approximately:a. 10%b. 12%c. between 10% and 12%d. 16%
A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $48,000, there is no trade-in, and the down payment is $3,000. Find the monthly lease payment (in dollars). Assume that the residual value is 48% of the MSRP of $51,800.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS