All categories

3 years ago

Someone may choose to own a car instead of leasing because

2 answers:

8 0

<u>Someone can choose to own a car instead of leasing it because the car can be resold later to make some money back. </u>

Further Explanation:

Owning a car: When a person buys the car it becomes the asset of that person. The person becomes the owner of the car after the payment of the value of the car. After the purchase of the car, the owner does not have to follow any condition as the car is owned by him. The owner can use it in any manner and sale it anytime he wants. The re-sale amount of the car is lower than the purchase amount of the car.

Leasing a car: The lease is an agreement between two parties for the use of an asset for a definite period in the exchange of some monetary compensation. When a car is leased the person does not get the ownership of the car. They have to pay the periodic (monthly, quarterly or yearly) installment as rent for the use of the car. The user of the car has to return the car at the end of the lease. The lessor may put some conditions regarding the use of the car. It restricts the free use of the car.

Choosing purchase (own) of a car instead of leasing:

The person can choose to purchase (own) the car because the owner of the car can resale it anytime and realize some value of the car.

The owner of a car has all the rights related to the car. In the case of leasing, the lessee does not have rights related to the re-sales of the asset. The lessee has to return the car when the lease agreement ends. The lessee would not get any monetary compensation in case of returning the car, but when the owner of the car sells it, he would realize some money.

<u>Thus, someone can choose to own a car instead of leasing it because the car can be resold later to make some money back. </u>

Learn more:

1. Learn more about choosing the purchase of car or leasing

brainly.com/question/2731676

2. Learn more about choosing the purchase of the car

brainly.com/question/1258129

3. Learn more about renting and owning

brainly.com/question/2288011

Answer details:

Grade: Senior School

Subject: Accounting

Chapter: Leasing

Keywords: Leasing, purchase, lease agreement, ownership of the asset, asset, someone, may choose, own a car, instead of, leasing, resold, some money back, later, higher price, maintenance costs, leased car are generally higher, insurance costs, higher.

jonny [76]3 years ago

6 0

<span>Someone may choose to own a car instead of leasing because they may end up needing to drive it farther and longer than the set milage or wanting to own the vehicle outright instead of making lease or rental payments. If you damage the vehicle, it also becomes more expensive because you do not own it entirely. Reporting damage or mile overage to the leasing company results in fees and penalities. </span>

You might be interested in

HW2: ABC Co. acquired the $100,000, 6% bonds on 2001/12/31. Market price of the bonds: $102,723 (including brokerage fee of $153

weqwewe [10]

The preparation of the related journal entries for each period for ABC Co. is as follows:

<h3>Journal Entries:</h3>

2001/12/31 Debit Bonds Receivable $100,000

Debit Bonds Premium $2,723

Credit Cash $102,723

2002/12/31 Debit Cash $6,000

Credit Interest Revenue $5,136

Credit Amortization of Bonds Premium $864

2003/12/31 Debit Cash $6,000

Credit Interest Revenue $5,093

Credit Amortization of Bonds Premium $907

2004/9/30 Debit Cash $105,500

Credit Interest Revenue $3,786

Credit Amortization of Bonds Premium $952

Credit Bonds Receivable $100,000

Credit Realized Gain $762

<h3>Data and Calculations:</h3>

Periods Cash Interest Revenue Premium Carrying Value

Receipt Amortization

2001/12/31 102,723

2002/12/31 6,000 5,136 864 101,859

2003/12/31 6,000 5,093 907 100,952

2004/12/31 6,000 5,048 952 100,000

The fair market value of the bonds:

Periods Fair Market Value

2002/12/31 104,200

2003/12/31 103,000

2004/9/30 105,500

<h3>Journal Entries Analysis:</h3>

2001/12/31 Bonds Receivable $100,000 Bonds Premium $2,723 Cash $102,723

2002/12/31 Cash $6,000 Interest Revenue $5,136 Amortization of Bonds Premium $864

2003/12/31 Cash $6,000 Interest Revenue $5,093 Amortization of Bonds Premium $907

2004/9/30 Cash $105,500 Interest Revenue $3,786 Amortization of Bonds Premium $952 Bonds Receivable $100,000 Realized Gain $762

Learn more about recording bond transactions at brainly.com/question/16048929

#SPJ1

5 0

2 years ago

Division A offers its product to outside markets for $30. It incurs variable costs of $11 per unit and fixed costs of $75,000 pe

olga55 [171]

Answer:

a. See part a below for the analysis.

b. We have:

1. Division A total cost = $1,131,000

2. Division A total profit or benefit = $1,509,000

3. Division B total cost = $1,320,000

4. Division A total profit or benefit = $44,000

Explanation:

Note: See the attached excel file for the calculation of calculation of costs and benefits of options available to Divisions A and B.

a. What are the costs and benefits of the alternatives available to Division A and Division B with respect to the transfer of Division A's product? Assume that Division A can market all that it can produce.

Under this condition, each analysis is based on the condition that either Division A or Division B will pay for the transportation cost.

From part a the attached excel file, we have:

1. Division A will incur a total cost of of $559,000 and gets a profit or benefit of $761,000 if it sells to the outside market.

2. Division A will incur a total cost of of $647,000 and gets a profit or benefit of $673,000 if it sells to Division B.

3. Division B will incur a total cost of $1,408,000 if it buys from Division A.

4. Division B will incur a total cost of $1,364,000 if it buys alternate supplier. It thereby saves the transportation cost of $88,000 of buying from A as a benefit.

b. How would your answer change if Division A had idle capacity sufficient to cover all of Division B's needs?

Under this condition, it is assumed that Division A will pay for the transportation cost. Therefore, Division A will sell to both the outside market and Division B.

From part b of the attached excel file, we will have the following based on this condition:

1. Division A total cost = Total cost of selling to the outside market + Total cost of selling to Division B = $559,000 + $572,000 = $1,131,000

2. Division A profit or benefit cost = Total profit or benefits of selling to the outside market + Total profit or benefits of selling to Division B = $761,000 + $748,000 = $1,509,000

3. Division B will incur a total cost of $1,320,000 by buying from Division A. It thereby saves $44,000 (i.e. $1,364,000 - $1,320,000 = $44,000) as a benefit for not buying from alternate supplier.

Download xlsx

3 0

2 years ago

The Playa Company has the following information in its records. Certain data have been intentionally omitted ($ in thousands). R

Zinaida [17]

Answer:

Explanation:

using the following formulars

Net purchase = (Gross Purchase) - (purchase return) - (purchase discount) + freight-in

Beginning inventory + Net purchases = cost of goods available for sales

Cost of goods sold = cost of goods available for sale - ending inventory

for 2013 we have that

beginning inventory = cost of goods available for sale - net purchases

Net purchases = 630 - 24 - 18 + 13 = 601

2013, beginning inventory = 876- 601 = 275

Ending inventory = 876 - 627 = 249

2014,

Begning inventory = closing inventory of 2013 = 249

Cost of goods available for sale = 621 + 225 = 846

Net purchase -Cost of goods available for sale - beginning inventory = 846 - 249 = 597

Gross purchase = 597 + 15 + 30 - 32 = 610

2015

Cost of good sold = 800 - 216 = 784

Net purchase = 800 - 225 = 575

purchase discount = 585 -575 - 14 + 16 = 12

4 0

2 years ago

Phillips Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growt

mr_godi [17]

Answer:

$69.47

Explanation:

D1 = ($1.45*1.20) = $1.7

D2 = ($1.7*1.20) = $2.04

D3 = ($2.04*1.20) = $2.45

Value after year 3 = (D3*Growth Rate) / (Required rate-Growth Rate)

Value after year 3 = ($2.45*1.08) / 0.11-0.08

Value after year 3 = $2.646 / 0.03

Value after year 3 = $88.20

Current share price = Future dividend and value*Present value of discounting factor(rate%,time)

Current share price = $1.7/1.11 + $2.04/(1.11)^2 + $2.45/(1.11)^3 + $88.20/(1.11)^3

Current share price = $1.5315315 + $1.65571 + $1.7914189 + $64.49107

Current share price = $69.4697304

Current share price = $69.47

8 0

2 years ago

To manufacture 3,000 pairs of sandals in a week, a firm can use 3,600 workers and 135 machines or 270 machines and 3,300 workers

Nutka1998 [239]

Answer:

3,600 workers and 135 machines is more technically efficient.

Explanation:

a. For 3,600 workers and 135 machines

Worker technical efficiency = 3,600/3,000 = $120%

Machine technical efficiency = 135 / 3,000 = 4.50%

Average technical efficiency = (120% + 4.5%) / 2 = 62.25%

b. For 270 machines and 3,300 workers.

Worker technical efficiency = 270/3,000 = $9%

Machine technical efficiency = 3,300 / 3,000 = 110%

Average technical efficiency = (9% + 110%) / 2 = 59.50%

Conclusion

Since the average technical efficiency of 62.25% is higher than 59.50%, 3,600 workers and 135 machines is more technically efficient.

8 0

3 years ago