WorkSheet 5.1 completed for FPE2

WorkSheet 5.1 completed for FPE2 - $ $ PURCHASE DECISION If...

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AUTOMOBILE LEASE VERSUS PURCHASE ANALYSIS* Item Description Amount LEASE Name 1 Initial payment: a. Down payment (capital cost reduction) b. Security deposit 2 Term of lease and loan (years)* 3 Term of lease and loan (months) (Item 2 ± 12) 4 Monthly lease payment 5 Total payments over term of lease (Item 3 ± Item 4) 6 Interest rate earned on savings (in decimal form) 7 Opportunity cost of initial payment (Item 1 ± Item 2 ± Item 6) 8 Payment/refund for market value adjustment at end of lease ($0 for closed-end leases) and/or estimated end-of-term charges 9 Total cost of leasing (Item 1a ± Item 5 ± Item 7 ± Item 8) $ $ $ $ $
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Unformatted text preview: $ $ PURCHASE DECISION If the value of Item 9 is less than the value of Item 16, leasing is preferred; otherwise the purchase alternative is preferred. 10 Purchase price 11 Down payment 12 Monthly loan payment (Terms: ___________, ____ months, ____ %) 13 Total payments over term of loan (Item 3 ± Item 1 2 ) 14 Opportunity cost of down payment (Item 2 ± Item 6 ± Item 1 1 ) 15 Estimated value of car at end of loan 16 Total cost of purchasing (Item 11 ± Item 13 ± Item 14 ² Item 15) $ $ $ $ $ $ Date 400 400 3 36 285 10,260 .04 48 10,308 10,920.00 36 8 12,720 1,800 340 12,240 216 4,300 9,956...
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This note was uploaded on 11/06/2011 for the course BUS Ethics101 taught by Professor Jsmith during the Spring '11 term at Lakehead.

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