5. Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4,000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding. Should you purchase the delivery truck or lease it? Why?
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- You have to buy a new copier. The cost of the copier is $1,900, plus $415 per year in maintenance costs. The copier will last for five years. Alternatively, a local company offers to lease the copier to you and do the maintenance as well. If your discount rate is 6.5%, what is the most you would be willing to pay per year to lease the copier (your first lease payment is due in one year)? (Select the best choice below.) A. The most you would be willing to pay per year to lease the copier is $415. B. The most you would be willing to pay per year to lease the copier is $3,624.61. C. The most you would be willing to pay per year to lease the copier is $872.21. D. The most you would be willing to pay per year to lease the copier is $1,900.Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $250 000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $5 000 (paid at the end of each month). Your firm can borrow at 5% APR with quarterly compounding. What is the present value of lease payments? (Rounded to the nearest dollar)You are considering purchasing a new automobile with the upfront cost of $26,000 or leasing it from the dealer for a period of 48 months. The dealer offers you 2.80% APR financing for 5 years (with payments made at the end of the month). Assuming you finance the entire $26,000 through the dealer, your monthly payments will be closest to $425.09 $429.11 O $473.25 $428.85
- You are planning on buying a new house and want to make sure you can afford the monthly payments. The house you picked will necessitate you borrow $300,000. You think you can get the following. mortgage terms: borrow $300,000 at a fixed quoted (nominal) annual rate of 3.775%; to be paid off in equal monthly payments over 15 years.Compute the required monthly payment, and prepare an amortization table, showing for each month the beginning balance, payment, payment applied to interest, payment applied to principal, and ending. balance. (Assume monthly compounding) (solution needs to be in excel)You have found your dream house. The selling price is 120,000. You will put $20,000 down and obtain a 25-year fixed-rate mortgage at 8.75% (APR compounded semiannually) for the rest. You plan to prepay the loan by making an additional payment each month along with your regular payment. How much extra must you pay each month if you wish to pay off the load in 20 years? (Assume there is no early payment penalty).3) You are purchasing a car and have the option to pay $25,000 in cash (upfront) OR assume a lease with end of the month payments of $399 for five years. By purchasing, you will receive an estimated residual value (or scrap value) by selling the car for $2,500 at the end of the 5 years. If interest is 2.7% compounded annually, which financing option would you prefer? (16.1 DCF)
- Your uncle will sell you his bicycle shop for $170o,000, with "seller financing," at a 6.0% nominal annual rate. The terms of the loan would require you to make 12 equal end-of-month payments per year for 4 years, and then make an additional final (balloon) payment of $50,000 at the end of the last month. What would your equal monthly payments be? O a. $2,792.07 O b. $3,681.84 C. $3,068.20 O d. $3,129.57 e. $2,362.52There are two options to purchase a car: a 5-year loan vs. a lease of the car. The price of the car is $50,000. If you purchase the car, you are going to pay it off in monthly payments over the next 5 years at an annual percentage rate of 6.99 percent. You expect to sell the car for $28000 in five years. If you lease the car, you have to pay 20% of the price of the car today and $550 per month for the next five years. Should you lease or buy the car? What break-even resale price in five years would make you indifferent between two options? (Your answers should be accurate to the nearest dollar)You plan to purchase a $500,000 home with a 20% down payment. You can take out a 30-year FRM of $400,000 at an APR of 7.2%. (1) What is your monthly payment? (2) If you make regular monthly payments, how long will it take to pay off half of the loan? (i.e., reduce the principle of the loan balance to half) (3) After making regular monthly payments for 10 years, how much will be the loan balance? Assume you obtain two quotes with and without (discount) points: either 7.2% APR without point or 6% with 2.5 points.
- 1. You have a choice of leasing a truck for six years at $9,000/year, paid at the end of each year, or buying the truck for $44,000. At the end of six years the truck would be worthless. The interest rate is 5.5%. Would you lease or buy? 2. A similar situation as #1: lease for $9,000/year, or buy for $44,000, but if you buy the truck, and pay to maintain the truck (e.g. change oil and other fluids, replace windshield wipers, belts, tires, etc.), which are $500/year, paid at the end of each year, then at the end of six years, the truck would be worth $2,000 and you could sell the truck. Would you lease or buy?Please answer the following problem with full working: You wish to purchase a home for $500,000. You will make payments of $30,000 at the end of every year for 30 years. The current rate of interest is 6.5% convertibly quarterly. Find the down payment that will be necessary.You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 30-year mortgage loan for 80 percent of the $3,500,000 purchase price. The monthly payment on this loan will be $15,100. What is the APR on this loan? The EAR?