Answer:
$33467.03
Explanation:
Given: we are given that $33000 is the cost of the car that’s on sale if the person wants a cash option.
Leasing option of $495 per month for the next two years with an immediate payment of $95 as a balloon payment for the vehicle.
The person will sell the vehicle for $21000 after 2 years from now.
We need to calculate the breakeven price to sell the vehicle after two years if the person sold the car on either option.
Therefore we will use the future value annuity formula to calculate how much would yield on the lease payments of $495 after two years first.
![Fv = P [((1+r) ^n)-1)/r]](https://tex.z-dn.net/?f=Fv%20%3D%20P%20%5B%28%281%2Br%29%20%5En%29-1%29%2Fr%5D)
Where Fv is the future value that will yield from the payments.
P is the periodic payment which is $495 per month.
r is the interest per period so in this case it is 5%/12 as the 5% is on an annual basis and the individual will make monthly payments.
n is the number of payments made and in this case it is 24 payments because $495 is paid monthly for 2 years.
Now we insert the values on the formula above
Fv = $495 [((1+ (5%/12) ^24)-1)/ (5%/12)] then compute on a calculator and get the answer
Fv = $12467.03 + $95 we add $95 to the solution because the customer must pay it as a deposit if they choose the lease option.
The value the customer must sell the car for to break even for both options in two years’ time is the sum of $21000 which the customer sells the car for in two years’ time plus the above future value for the lease repayments, so $21000+ $12467.03 =$33467.03 .
Answer:
True (1)
Explanation:
In deciding whether to buy a particular product, it is important to consider below pertinent issues :
Serviceability : questions need to be asked whether the product can be serviced regularly to keep it in usable condition and possible cost of servicing must as well be considered.
Repairability : Seller must be asked if the product is repairable in case it is faulty.
Accessories : Availability of accessories in the market must be confirmed from the seller in case we need to replace any part.
Failure to sort out above issues before buying may result in wasting of money at the end of the day even though product might have been bought at a cheaper lock-in price.
The research design evidently has a problem with <u>"validity".</u>
Validity refers to how well a logical test or bit of research really allots what it sets to, or how well it mirrors the truth it professes to speak to. Like reliability, validity in this sense is an idea drawn from the positivist logical convention and necessities particular understanding and utilization with regards to qualitative research.
Answer:
Intrinsic value is $45
Explanation:
The starting point to determining Rivoli Company intrinsic value is to compute the earning after tax as shown below:
Earnings after tax=earning before tax*(1-tax rate)
earnings before tax is $600,000
tax rate
earnings after tax=$600,000*(1-0.25)
=$600,000*0.75
=$450,000
Then we need to compute earnings per share;
Earnings per shares=earnings after tax/weighted average number of shares
=$450,000/100,000
=$4.5
Intrinsic value=earnings per share/cost of equity
cost of equity is 10%
intrinsic value=$4.5/10%
=$45
Answer:
b. Production
Explanation:
Global Value Chains have been successful over the years due to most components being produced in the country where<em> it is cheaper to do so</em> and then the final output<em> is integrated in other country</em>.
Thus globalization of production has enabled <em>firms</em> to take advantage of national differences in the cost and quality of factors of production.
