QSO 510 Scenario Analysis Module 4

QSO 510 Scenario Analysis Module 4 - 1 Are there factors...

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1. Are there factors other than interest rate charged for a loan that the finance manager should consider in predicting future car sales? Yes. Car buying is generally the second most expenditure Americans make after their home. Buyers include not only the interest rate but also the monthly car loan payment, all the costs to operate the vehicle, including gasoline costs and car insurance. Dealerships giving cash back and rebates are very popular with consumers. Many car buyers use a vehicle information source like Kelley Blue Book or Edmunds.com to see what incentives are being offered. Other than the financial aspect of buying a car, consumers look at customer service, vehicle maintenance at the dealership, and finding the car they want in the dealership’s inventory. 2. Is interest rate charged for a loan the most important factor to be considered in predicting future car sales? Explain your reasoning. The dealership’s vice-president of marketing has requested a sale forecast at the prevailing interest rate of 7%.
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