Question

BUS 319 Exercise 23 You are in the process of getting a new car priced at...

BUS 319
Exercise 23

You are in the process of getting a new car priced at $24,000, but you are not sure if you should lease it or buy it. Open a new Excel workbook. Include your name and save it as “your name 23.xlsx”.



You could sell your current car for $4,000 and use the funds as a lease down payment, reducing the financed amount to $20,000. The lease would run for four years with an annual interest rate (APR) of 6%. At the end of the lease, the residual value (future value) would be $8,000. The lease payments would be due at the end of each month.

If you decide to buy the car, the dealer will give you a $6,000 trade-in allowance on your current vehicle and will finance the remaining $18,000 for five years at 4% APR with payments due at the beginning of each month. You would own the car at the end of the five-year period, but the value of the car at that time (the future values) is unknown and assumed to be zero.

Hint: It is important to note if payments will be made at the beginning of the month or at the end of the month.

Create a 3-column table that shows the difference between leasing and buying the car in terms of monthly payments. Hint: Use the PMT function. Include column and row headings. The first column should contain labels (such as “Price”), the second column should contain “lease” data and the third column should contain “buy” data. Hint: The monthly lease should be $321.82.

Use proper formatting so your worksheet is easy to read. Add the title “Santa Rosa” to your table, merged and centered over the three columns.

You decide to visit the dealership in Healdsburg. Copy your “Santa Rosa” table to a nearby location and change the title to “Healdsburg”. The Healdsburg dealer will sell you the same car for only $23,500, with $5,500 trade-in allowance and 5% APR. You could also lease the $23,500 car from Healdsburg with a down payment of $3,500 with a 5% APR. All other Healdsburg data is the same as Santa Rose. Revise your Healdsburg table with the appropriate data. Hint: The Healdsburg monthly payments to purchase the vehicle should be $338.27.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Горе- Answer:- As per the given question there are two decisions facts for buying or leaving a car Leave decision - facts PurPage-2 Buy Decision - facts I Purchase Exchange value of car Remaining value TROI Residual value 1824,000 $6,000 $18,000 | 40

Add a comment
Know the answer?
Add Answer to:
BUS 319 Exercise 23 You are in the process of getting a new car priced at...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • You are in the process of getting a new car priced at $24,000, but you are...

    You are in the process of getting a new car priced at $24,000, but you are not sure if you should lease it or buy it. Open a new Excel workbook. You could sell your current car for $4,000 and use the funds as a lease down payment, reducing the financed amount to $20,000. The lease would run for four years with an annual interest rate (APR) of 6%. At the end of the lease, the residual value (future value)...

  • After deciding to get a new car, you can either lease the car or purchase it...

    After deciding to get a new car, you can either lease the car or purchase it with a three-year loan. The car you wish to buy costs $34,500. The dealer has a special leasing arrangement where you pay $1 today and $450 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at an 8 percent APR. You believe that you will be able to...

  • You decided to buy a new car, and you can either lease the car or purchase...

    You decided to buy a new car, and you can either lease the car or purchase it on a three- year loan. The car you wish to buy costs $32,000. The dealer has a special leasing arrangement where you pay $99 today and $450 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at a 7 percent APR. You believe you will be able...

  • After deciding to buy a new car, you can either lease the car or purchase it...

    After deciding to buy a new car, you can either lease the car or purchase it on a 3-year loan. The car you wish to buy costs $43,000. The dealer has a special leasing arrangement where you pay $4,300 today and $505 per month for the next 3 years. If you purchase the car, you will pay it off in monthly payments over the next 3 years at an APR of 6%. You believe you will be able to sell...

  • Edna has found your dream vehicle that it is priced at $30,000. She can arrange for...

    Edna has found your dream vehicle that it is priced at $30,000. She can arrange for financingfrom the bank with 0 down and monthly payments (at the end of each month) at an annualized interest rate of 12% (r = 0.12), with a term of 60 months. If she buys it, it is hers. Alternatively, the dealer offers to lease it to her for four years. The terms of the lease are monthly payments (end of month) of $400 for...

  • After deciding to buy a new Mercedes-Benz C Class sedan, you can either lease the car...

    After deciding to buy a new Mercedes-Benz C Class sedan, you can either lease the car or purchase it on a three-year loan. The car you wish to buy costs $35,000. The dealer has a special leasing arrangement where you pay $99 today and $499 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at a 6 percent APR compounded monthly. You believe you...

  • After deciding to buy a new Mercedes-Benz C Class sedan, you can either lease the car...

    After deciding to buy a new Mercedes-Benz C Class sedan, you can either lease the car or purchase it on a three-year loan. The car you wish to buy costs $35,000. The dealer has a special leasing arrangement where you pay $99 today and $499 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at a 6 percent APR compounded monthly. You believe you...

  • 14 Problem 5-39 Loan Payments (LG5-9) You wish to buy a $23,500 car. The dealer offers...

    14 Problem 5-39 Loan Payments (LG5-9) You wish to buy a $23,500 car. The dealer offers you a 5-year loan with a 9 percent APR. What are the monthly payments (Do not round intermediate calculations and round your final answer to 2 decimal places.) -Book Payment per month Hint erences How would the payment differ if you paid interest only? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment per month

  • You need a new car. You can either lease or buy the car for 365 000...

    You need a new car. You can either lease or buy the car for 365 000 SEK. In both cases you expect to use the car for 5 years. It will have a residual value of 120 000 SEK after 5 years. You can borrow at a rate of 3.5% APR with monthly compounding. (a) In case you buy the car you will take an annuity loan over 5 year at a borrowing rate of ${col}%. What will be your...

  • You need a new car. You can either lease or buy the car for 365 000...

    You need a new car. You can either lease or buy the car for 365 000 SEK. In both cases you expect to use the car for 5 years. It will have a residual value of 120 000 SEK after 5 years. You can borrow at a rate of 3.5% APR with monthly compounding. (a) In case you buy the car you will take an annuity loan over 5 year at a borrowing rate of ${col}%. What will be your...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT