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victus00 [196]
2 years ago
5

You have decided to buy a used car. The dealer has offered you two options: (FV of S1, PV of $1, FVA of $1, and PVA of $1) (Use

the appropriate factor(s) from the tables provided.)
a. Pay $540 per month for 25 months and an additional $10,000 at the end of 25 months. The dealer is charging an annual interest rate of 24%.
b. Make a one-time payment of $16,638, due when you purchase the car.
1-a. Determine how much cash the dealer would charge in option (a). (Round your final answer to nearest whole dollar.) Present value
1-b. In present value terms, which offer is clearly a better deal?
a. Option a
b. Option b
c. The present values of the options are nearly the same
Business
1 answer:
Pachacha [2.7K]2 years ago
5 0

Answer:

1-a.

in order to determine the present value of option a we can look for the PVIFA (annuity factor) for 24% / 12 = 2% monthly rate and 25 payments.

PVIFA = 19.523

Present value of the 25 payments = $540 x 19.523 = $10,542.42

+

Present value of final payment = $10,000 / (1 + 24%)²⁵/¹² = $6,388.10

PV = $16,930.52

Present value of option b = $16,638

1-b.

  • b. option b (lower present value)
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Answer:

4,800 bottles

Explanation:

The formula to compute the number of bottles sold is shown below:

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where,  

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When bonds are issued at their face amount, the journal entry will include a __________ to __________.
Eva8 [605]
D. Credit; bonds payable
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sladkih [1.3K]

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$143,750

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3 0
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Houpe Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Sell
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Effect on income= -$2,100

Explanation:

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Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $
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$1,702 , $1,497, and $1,957

Explanation:

The computation of the total cost is shown below:

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Direct Material  $816          $516  $616

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We simply added the direct labor cost, direct material cost and the overhead cost so that the total cost could come

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