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lukranit [14]
3 years ago
11

Your firm needs to invest in a new delivery truck. the life expectancy of the delivery truck is five years. you can purchase a n

ew 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 $4000 (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?
Business
1 answer:
Rasek [7]3 years ago
3 0

First we need to calculate the monthly discount rate for the lease arrangement (EAR):

EAR = (1 + APR / k)^k - 1

= (1 + .06 / 4)^4 – 1

<span> = .06136 or 6 .14% </span>

Monthly rate = (1 + EAR)^(1/12) – 1

= (1.06136)^(1/12) - 1

= .004975 = 0.4975%

Now we can apply the formula for the PV of a constant annuity:

I = .4975

N = 60 = (5 years × 12 months/yr)

FV = 0

PMT = $4000 (lease payment)

Compute PV = 207,051.61

<span>Answer:  Therefore you should purchase the new delivery truck.</span>

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Fixed cost refers to: Group of answer choices the consideration exchanged for the ownership or use of a good or service. total e
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Answer:

Expenses that are stable and do not change with the quantity of products that is produced and sold

Explanation:

Fixed cost refers to cost that do not change with the level of output. They are otherwise known as overheads or indirect costs and are expenses that are not dependent on the out level of produce by the business.

In addition, fixed cost are also cost that has to be incurred by the business independent of business activities.

Examples of fixed costs are rent, cost of business , loan payments, insurance premiums, salaries etc. All these do not vary with the level or number of units produced or sold.

5 0
3 years ago
Employees and customers are treated like a family at Rahal Realty. Fadil and Inas Rahal, the owners, work to encourage unity to
Sever21 [200]

The type of culture that Rahals built was clan culture, when the owners, work to encourage unity to increase their employees' job satisfaction and commitment.

<h3>What is clan culture?</h3>

A clan culture can be regarded as a tribe-like type of corporate environment which believe in

commonality of goals and values.

Clan cultures usually appears as collaborative and the least competitive of the main corporate culture models.

Learn more about culture at;

brainly.com/question/25010777

5 0
2 years ago
On January 1, 2012, Albert invested $6,000 at 8 percent interest per year for three years. The CPI (times 100) on January 1, 201
qaws [65]

Answer:

Inflation in 2012:

=\frac{CPI\ 2013 - CPI\ 2012}{CPI\ 2012}

=\frac{110 - 100}{100}

= 10%

Inflation in 2013:

=\frac{CPI\ 2014 - CPI\ 2013}{CPI\ 2013}

=\frac{120 - 110}{110}

= 9.09%

Inflation in 2014:

=\frac{CPI\ 2015 - CPI\ 2014}{CPI\ 2014}

=\frac{126 - 120}{120}

= 5%

Real rate of interest = Nominal - inflation

Given that,

Nominal rate = 8%

Therefore,

Real interest rate is as follows:

2012:

= 8% - 10%

= -2%

2013:

= 8% - 9.09%

= -1.09%

2014:

= 8% - 5%

= 3%

$6000 at 8% grows to:

= 1000 × 1.08

= $6,480 in one year

which is invested again to grow to $6,998.4 in two years

which is invested again to grow to $7,558.272 in three years

so,

Total gain:

=\frac{7,558.272-6,000}{6000}\times100

= 25.9712%

The price level increases in three years by:

=\frac{CPI\ 2015 - CPI\ 2012}{CPI\ 2012}\times 100

=\frac{126 - 100}{100}\times 100

= 26%

So,

Total real rate of return:

= Total gain - Percentage increase in prices

= 25.9712 - 26

= -0.0288%

5 0
3 years ago
The technology associated with the manufacturing computers has advanced tremendously. This change has led to the price of a comp
german
The technology associated with the manufacturing computers has advanced tremendously. This change has led to the price of a computer <u>falling</u> and the quantity <u>increasing</u>.

Lower prices most likely results in a higher demand for the product in question, which will increase the production rate of that product.
3 0
3 years ago
Read 2 more answers
Ginger's working on creating her first Google Search Ad. She wants to create an inviting and relevant ad, so potential customers
pav-90 [236]

has a larger font size

includes a current promotion

is listed after search results

includes at least two different colors

has a relevant headline

Answer:

has a relevant headline

includes a current promotion

Explanation:

A google search ad is a paid advertisement that is created to promote a product or service using the google ads platform and they appear in the search results on Google. To create a relevant ad that will earn user clicks, Ginger should focus on creating an ad that has a relevant headline that is related to the product or service so that it will attract the potential customers that are looking what she is offering. Also, the ad should include a current promotion that will increase potential customer's interest and call them to action.

The other options are not right because having a large font size, being listed after search results  and including at least two different colors  won't get customers interest and lead them to act by clicking on the ad.

7 0
3 years ago
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