Auto Leasing Inc. leases an automobile with a fair value of $40,000 to a customer over a four year period with payments due annually. The first payment is due on the first day of thelease. What is the annual lease payment if Auto Leasing Inc. desires a rate of return of 10% ?Note: Do not use a negative sign with your answer.$ 0

Step 1: Given Value for Calculation Present Value of Payment = pv = $40,000Time = t = 4Rate of…

Answered: Auto Leasing Inc. leases an automobile…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 96IIP

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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?
4. You plan to lease (Begin Mode!!!) a new care today. The dealership's finance office quotes you a deal with no money down and a $450 monthly payment (assume no taxes) for the next 36 months. Atthe end of the 36 months you plan to buy the car for $18,000. Thelisted price today for the car is $30,000 What CAP RATE (the interest rate on the lease) are they charging for this lease deal? Some notes: Think about which way your cash flows go. You willl make a $450 payment each month. You will also pay $18,000 at the end of the lease if you buy the car The I/Y you calculate for the MONTHLY payments is not the final answer! 1. 2. N I/Y PV PMT FV CAP RATE on the lease: (This is the answer to the question)
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?
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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
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A car dealer wants to offer you a 60 month lease on a $28,300 car. You can afford a $ 500 monthly payment and the dealer wants to earn a 9.4% APR. There is no down payment on the lease and monthly payments are due at the end of each month. What is the lowest estimated residual value for the car in order that the dealer earn's the their required annual percentage rate (APR). Round your final answers to the nearest dollar. A
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