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pshichka [43]
3 years ago
10

Your car dealer is willing to lease you a new car for $309 a month for 72 months. Payments are due on the first day of each mont

h starting with the day you sign the lease contract. If your cost of money is 4.9 percent, what is the current value of the lease
Business
1 answer:
kirza4 [7]3 years ago
6 0

Answer:

PV $19,242.04

Explanation:

We will calculate the present value of an annuity using our cost of capital

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C      309

time 72

rate           0.004083333 (A)

309 \times \frac{1-(1+0.0040833)^{-72} }{0.0040833} = PV\\

PV $19,242.04

This will be the present value of the lease at our capital rate.

<em>Notes</em>

(A)The payment are on a monthly basis, so the interest rate must be monthly to. For that we divide the 4.9 percent which is annual by 12

That way the time and rate are on the same metric.

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3 years ago
​Martinville, Inc. earned revenues of $ 17,000 and incurred expenses of $ 7,000. The company declared and paid cash dividends of
vladimir1956 [14]

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4 0
3 years ago
Phildell Phoenix is paid monthly. For the month of January of the current year, he earned a total of $8,288. The FICA tax rate f
AysviL [449]

Answer:

Total deduction                               2,443.21

Explanation:

8,288

x 6.20% Sccial Security                      513.856

x 1.45% Medicate                                120.176

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Income tax witheld                           1,375.17

Total deduction                               2,443.21

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We must noticew FUTA and SUTA applies fdor the first 7,000 only so we multiply by 7,000 not by 8,288

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