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Ad libitum [116K]
3 years ago
7

You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use

the appropriate factor(s) from the tables provided.) Pay $620 per month for 20 months and an additional $12,000 at the end of 20 months. The dealer is charging an annual interest rate of 24%. Make a one-time payment of $16,864, due when you purchase the car. 1-a. Determine how much cash the dealer would charge in option (a). (Round your answer to 2 decimal places.) 1-b. In present value terms, which offer is clearly a better deal
Business
1 answer:
Marysya12 [62]3 years ago
3 0

Answer:

1. In option (a), the dealer would charge $18,213.54.

b. In present value terms, the one-time payment (option (b) is a better deal for the purchaser.

Explanation:

a) Data and Calculations:

Monthly payment for a used car = $620

Payment period = 20 months

Additional payment at the end of 20 months = $12,000

Annual interest rate = 24%

One-time payment for the car purchase = $16,864

From an online financial calculator, the present value of the payments is:

N (# of periods)  20

I/Y (Interest per year)  24

PMT (Periodic Payment)  620

FV (Future Value)  12000

Results

PV = $18,213.54

Sum of all periodic payments = $12,400.00

Total Interest = $6,186.46

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Answer:

True

Explanation:

Altruistic Corporate Social Responsibility is a philanthropic approach of the company which undermines the interests of the shareholders because such programs are not approved by the shareholders. This clash between the interests of shareholders and the society is the argue that critics quote to protect the shareholders rights.

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3 years ago
If the equilibrium price of avocados is $4 and the government issues a price ceiling of $4.50, what is likely to happen in the m
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Answer:

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Explanation:

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What is used to calculate the cost of living index
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3 years ago
A car and a computer are examples of what?
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Question 1 Tamarisk Corporation issued 1,800 shares of $10 par value common stock upon conversion of 900 shares of $50 par value
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Answer:

The journal entries relating to the conversion of preferred stock to common stock are highlighted below:

Dr Preferred stock                                                 $45,000

Dr Paid-in capital in excess of par                        $9,900

Cr Common stock                                                                           $18,000

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Explanation:

Find in the attached the detailed computations of the amounts above.

Download xlsx
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