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- You are interested in selling your old car. A friend has offered to buy it for $3,500. You are satisfied with the deal because you would not be willing to pay more than $3,000 for it given its current condition. After reviewing the car market, you were sure no one would be willing to pay more than $3,200 for the car. What is the fair market value of the car?Solve the problem with complete solution. 9. You plan to buy a house and lot through home loan from a bank. The selling price is 1,800,000 and the bank requires a down payment of 20% of the selling price. How much is the down payment?A company is trying to decide whether to buy a new delivery truck to replace their old one. The old truck originally cost $32,000. The new truck will cost $45,000. If they buy the new truck, they will sell the old truck to a used truck dealer for $4,000. Based on the information given, what is the immediate total incremental cost or benefit of buying the new truck? (Indicate a net benefit as a positive number and a net cost as a negative number.)
- Suppose you want to buy a car. You have surveyed the dealers' newspaper advertisements, and the one shown has caught your attention. You can afford to make a down payment of $2,678.95, so the net amount to be financed is $20,000.(a) What would the monthly payment be?(b) After the 25th payment, you want to pay off the remaining loan in a lumpsum amount. What is this lump sum?Imagine that you are trying to evaluate the economics of purchasing an automobile. You expect the car to provide annual cash benefits of $1,200 at the end of each year, and assume that you can sell the car for proceeds of $5,000 at the end of the planned 5-year ownership period. All funds which are you use has 6% discount rate. What should be the required return applicable to valuing the car. Lütfen birini seçin: O a. 4% O b. 6% c. 5% O d. 7%You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $18,000." You have shopped around and know that you can buy a Spitfire for cash for $64,800. What is the interest rate the dealer is advertising (what is the rate that equates the PV of the payments to today's cash price of the car)? Assume that you must make the annual payments at the end of each year. C The rate that equates the PV of the payments to today's cash price of the car is %. (Enter your response as a percent rounded to two decimal places.)
- An auto dealership is running a promotional deal whereby they will replace your tires free of charge for the life of the vehicle when you purchase your car from them. You expect the original tires to last for 30,000 miles, and then they will need replacement every 30,000 miles thereafter. Your driving mileage averages 15,000 miles per year. A set of new tires costs $400. If you trade in the car at 150,000 miles with new tires then, what is the lump-sum present value of this deal if your personal interest rate is 12% per year?6. Suppose Hassan decides to explore the costs of financing a more expensive vehicle. The more expensive vehicle costs $34,900 in total and qualifies for the 3.9% dealer financing for 48 months or $2500 cash back. What is the highest effective annual rate of interest at which Hassan should borrow from the bank instead of using the dealer's 3.9% financing? Hassan's wife Dana also needs a car. While reading the newspaper, she notices an ad for an Acura TSX She thinks that it is her ideal vehicle. The ad quotes both a cash purchase price of $37,500 and a monthly lease payment option. Since she does not have enough money to pay cash for a car, she would have to finance it from Honda by paying interest of 5.9% compounded monthly on a loan. The lease option requires payments of $594 a month for 48 months with a $1,330 down payment or equivalent trade. Freight and air tax are included. Dana does not have a vehicle to offer as a trade-in. If the vehicle is leased, then after 48 months it could…You are in the market for a used car. At a used carlot, you know that the Blue Book value of the car youare looking at is between $15,000 and $19,000. Ifyou believe the dealer knows as much about the caras you do, how much are you willing to pay? Why?Assume that you care only about the expected valueof the car you will buy and that the car values aresymmetrically distributed.
- You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $12,000." You have shopped around and know that you can buy a Spitfire for cash for $38,400. What is the interest rate the dealer is advertising (what is the rate that equates the PV of the payments to today's cash price of the car)? Assume that you must make the annual payments at the end of each year.2. Suppose a business owner is trying to decide whether to invest in a new piece of machinery. The machine costs $160,000, and it is expected to generate revenue of $200,000. a. Solve for the expected rate of return on this machine. a. If the interest rate the business owner has to pay is 20%, will the business owner buy this machine? b. If the interest rate the business owner has to pay is 25%, will the business owner buy this machine? c. If the interest rate the business owner has to pay is 30%, will the business owner buy this machine?When would leasing a vehicle be a better option than buying? Describe in at least five sentences how you will prepare to purchase your next vehicle in order to (1) get the appropriate vehicle, (2) to get the best deal, and (3) to avoid getting ripped off. For the Questions 3-5 assume you want to finance (borrow) $12,000 for your next car and your interest rate will be 6%. What will be your monthly payment and the total amount paid over the life of the loan if you finance for 48 months? Provide the car payment and the TVM inputs you used to calculate the payment. Payment Total of all payments PV FV RATE/INTEREST PERIODS/N (See next page for Questions 4 and 5) What will be your monthly payment and the total amount paid over the life of the loan if you finance for 60 months? Provide the car payment and the TVM inputs you used to calculate the payment. Payment Total of all payments PV FV…