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True [87]
2 years ago
9

Automobiles are often leased, and there are several terms unique to auto leases. Suppose you are considering leasing a car. The

price you and the dealer agree on for the car is $27,600. This is the base capitalized cost. Other costs that may be added to the capitalized cost price include the acquisition (bank) fee, insurance, or extended warranty. Assume these costs are $1,050. Capitalized cost reductions include any down payment, credit for a trade-in, or dealer rebate. Assume you make a down payment of $3,000 and there is no trade-in or rebate. If you drive 12,000 miles per year, the lease-end residual value for this car will be $17,000 after three years.The lease or "money" factor, which is the interest rate on the loan, is the APR of the loan divided by 2,400. The lease factor the dealer quotes you is .00265. The monthly lease payment consists of three parts: A depreciation fee, a finance fee, and sales tax. The depreciation fee is the net capitalization cost minus the residual value, divided by the term of the lease. The net capitalization cost is the cost of the car minus any cost reductions plus any additional costs. The finance fee is the net capitalization cost plus the residual, times the money factor, and the monthly sales tax is the depreciation payment plus the finance fee, times the tax rate.
a. What APR is the dealer quoting you? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is your monthly lease payment for a 36-month lease if the sales tax is 7 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
kotegsom [21]2 years ago
3 0

Answer:

a. 6.36%

b. $378.02

Explanation:

a. The computation of Annual percentage rate is shown below:-

Annual percentage rate = Lease factor × 2,400

= 0.00265 × 2,400

= 6.36%

b. For computation of monthly lease payment first we need to find out the depreciation charge, finance charge and tax which is shown below:-

Depreciation charge = (Base cost + Other cost - Down payment - Residual value) ÷ Number of lease payment

= ($27,600 + $1,050 - $3,000 - $17,000) ÷ 36

= $8,650 ÷ 36

= $240.27

Finance charge = (Base cost + Other cost - Down payment - Residual value) × Lease factor

= ($27,600 + $1,050 - $3,000 - $17,000) × 0.00265

= $42,650 × 0.00265

= $113.0225

now,

Tax = (Depreciation charge + Finance charge) × Tax rate

= ($240.27 + $113.0225) × 7%

= $353.2925 × 7%

= $24.73

Monthly Lease payment = Depreciation charge + Finance charge + Tax

= $240.27 + $113.0225 + $24.73

= $378.02

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Answer:

Hmmm?

Explanation:

5 0
3 years ago
In 2019, Dan transferred 5-year property to Fleck Corp. in a tax-deferred Section 351 transaction. Fleck took Dan's adjusted bas
irina1246 [14]

Answer:

The property will be depreciated using the remaining 3 years of its life after the tax-free incorporation transfer year.  This is because Dan had already depreciated the property for 2 years before the transfer.

Explanation:

Sec. 351 allows a tax-free incorporation transfer if certain requirements are met, including that the property must be transferred to Fleck Corporation by Dan in exchange for stock in Fleck Corporation, and, immediately after the exchange, the Fleck Corporation is in control.

7 0
3 years ago
For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result
bearhunter [10]

Answer:

b. inelastic

c. Yes - it decreased

Explanation:

Elasticitiy of demand measures the responsiveness of quantity demanded to changes in price.

Elasticity of demand = percentage change in quantity demanded/ percentage change in price

= -2/4 = -0.5

The absolute value is 0.5

If the absolute value of the coffiecnet of elasticity of demand is less than one, demand is inelastic.

Demand is inelastic if a change in price has no effect on quantity demanded .

We can tell that the quantity demanded fell because of the negative sign in front of the percentage change in quantity demanded.

I hope my answer helps you

7 0
3 years ago
Which of the following statements is not accurate descriptions of the business market? Mrs. Phillip, a retail buyer for Blooming
Natali [406]

Answer:

Mrs. Phillip, a retail buyer for Bloomingdale's, does all the shopping for her family at the same store.

Explanation:

The business market is the market where you can sell your product and services to the other businesses so it can be used as a raw material for the other business in order to manufacture the products. And, the other reason is to purchased the products and resell them.

So based on the given statements, the first option is considered as in the remaining statements there are business transactions but in this only one person i.e. retail buyer is considered

8 0
2 years ago
As the economy declines into recession, the collection of personal income tax revenues automatically falls. this phenomenon best
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This phenomenon best illustrates how a progressive income-tax system serves as an automatic stabilizer for the economy.

<h3>What is an automatic stabilizer?</h3>

Automatic stabilizers are stabilizers that adjust the economy automatically without the intervention of external agents . Examples include progressive tax and transfer payments. A progressive tax is a tax structure where those who earn higher income are taxed more and those that earn less pay less amount of tax.

In an expansion, progressive tax increases the tax paid and this reduces disposable income. In a recession, tax paid is reduced and this increases disposable income

Here are the options:

increases crowding out in the economy

decreases real interest rates in the economy

offsets the timing problem for fiscal policy

Serves as an automatic stabiler for the economy

To learn more about taxes, please check: brainly.com/question/25311567

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8 0
2 years ago
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