A suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. The cars average 120,000 miles a year. Use EUAC to determine the more economical choice if interest rate is 5%. Diesel Gasoline Vehicle cost $ 24,000.00 $ 19,000.00 Useful life (in years) 5 4 Fuel cost per gallon $3.52 $ 3.68 Mileage per gallon 30 25 Annual repairs $ 900.00 $ 700.00 Annual insurance premium $ 1,000.00 $ 1,000.00 End of useful life resale value $ 4,000.00 $
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- The "Fly By Night" Used Car Lot uses the following to illustrate their 11.8% finance plan on a car paid over 4 years. Cost of the car: $15000 11.8% finance charge: $7080 (that is, 11.8%/year x $15000 x 4 years) Total cost: $22080 $22080 Monthly payment: $460. 48 The first payment must be made one month after purchase. On the other hand, if you pay cash the dealer will offer you a discount of 5% of the cost of the car. What is the true interest rate compounded monthly being charged? Answer:Two plans are available for a company to obtain automobiles for its salesmen. How many miles must the cars be driven each year for the two plans to have the same costs? Use an interest rate of 10%. Plan A: Lease the cars and pay PO.52 per mile. Plan B: Purchase the cars for P9.238 and economic life of three years after which it can be sold for P2,021, Gas and oil cost PO.07 per mile. Insurance is P500 per year.1.1 Consider the following costs of owning and operating a car. An $18,000 Fiat 500 Pop financed over 60 months at 4 percent interest means a monthly payment of $331.50. Insurance costs $120 a month regardless of how much you drive. The car gets 35 miles per gallon and uses regular-grade gasoline that costs $2.60 per gallon. Finally, suppose that wear and tear on the car costs about 20 cents a mile. Which costs are fixed, and which are variable? What is the marginal cost of a mile driven? In deciding whether to drive from Atlanta to Las Vegas (about 2,000 miles round-trip), which costs would you consider? Why?
- You are in need of a car. After much research you have decided to purchase a new 2023 Toyota Camry. The list price for the car at the local dealership is $25,945 including tax, title, and license. When you visit the dealership the finance manager provides you with three purchasing options. Option A: 5.64% APR, compounded monthly, for 72 months with $0 down at the time of purchase Option B: 0% APR, compounded monthly, for 48 months with $1000 down at the time of purchase Option C: 5.49% APR, compounded monthly, for 60 months with $5000 down at the time of purchase For each purchasing option, compute the required monthly payment, the total amount you will have paid for your car, and • for the first loan payment, how much money will go towards interest and how much money will go towards the outstanding balance?0. Brand B car costs $79,000 and has a life of 8 years. It costs $2,500 a year in insurance, and $525 a year in fuel consumption. Brand M car costs $67,000 and has a life of 6 years. It costs $2,100 a year in insurance and $600 a year in fuel consumption. If the discount rate is 6% p.a. compounded annually, which kind of car is cheaper to run?A local car dealership is selling a new compact car for $18 995 plus HST. The dealership offers financing at 4.9% annual interest, compounded monthly for 5 years. You have $4000 for a down payment and you will finance the rest. i) What is the total cost of the car, including HST only. ii) Calculate your monthly payment. Be sure to show what values you use for the TVM solver.
- You want to buy a Honda Civic. The MSRP is $26,185. Honda offers a purchase financing plan with no money down and 48 end-of-month payments of $550. Should you buy the car for cash or take Honda's purchase financing? You have the cash and you could invest it and earn at least 4%. Question content area bottom Part 1 What is the present value of all the payments? (Round to the nearest cent.) Which of the following statements is true? (Choose the best response.) A. You should borrow money to buy the car because its present value is lower. B. You should pay cash to buy the car because its present value is lower. C. You should pay cash to buy the car because its present value is higher. D. You should borrow money to buy the car because its present value is higher.A cloud storage engineer purchased a new car for $31,990. Complete the table below to determine the cost of owning the car for the first year of ownership. Assume the car has an average fuel efficiency of 35 miles per gallon and a 4-year loan at an annual interest rate of 3.75% on the purchase price less the down payment. (Round your answers to the nearest cent.) What are the loan payments for 1 year?Which car to buy? Mr. Fox is a taxi company owner. He is going to buy a new car. Cars M, C, R suite his needs and the prices are 25000, 22000, 23000 euros accordingly. His decision will be based on total costs per kilometer criterion. All the necessary data is given in the table below. Table Costs of the cars Costs Car Fixed costs per year M R Salary 13200 13200 13200 Depreciation, 15% Car insurance, 8% *** Variable costs per 100 km Fuel 11.50 13.10 12.60 Oil 1.17 1.31 1.26 Maintenance and Repair 7.90 8.80 7.79 Tire wear 1.85 2.10 2.25 Calculate fixed, variable and total costs per kilometer for each car. Find a recommended price per kilometer, if 80% of it equals to the total costs per kilometer. Use the Data/Table tool to calculate an average criterion value and deviation from the average for each vehicle when the distance travelled per year changes from 10000 up to 40000 km in steps of 2000 km. build a chart of deviations to facilitate Mr. Fox decision. Write down your…
- k You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Kia Rio, which will cost $17,000 to purchase and which will have OCF of -$1,800 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $25,000 to purchase and which will have OCF of -$950 annually throughout that vehicle's expected 4-year life. Both cars will be worthless at the end of their life. If you intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future. If the business has a cost of capital of 12 percent, calculate the EAC. Note: Negative amounts should be indicated by a minus sign. Do not round your intermediate calculations. Round your answers to 2 decimal places. EAC Rio EAC Prius Which one should you choose?Evaluating financing packages. Assume that you’ve been shopping for a new car and intend to finance part of it through an installment loan. The car you’re looking for has a sticker price of $18,000. Custom Vehicles has offered to sell it to you for $3,000 down and finance the balance with a loan that will require 48 monthly payments of $333.67. However, a competing dealership will sell you the exact same vehicle for $3,500 down, plus a 60-month loan for the balance, with monthly payments of $265.02. Which of these two financing packages is the better deal?Give typing answer with explanation and conclusion Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully-depreciated vans, which you think you can sell for $3,700 a piece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $36,000 each in the configuration you want them, and can be depreciated using MACRS over a 5-year life, but you are unable to make use of either bonus depreciation or Section 179 expensing. Expected yearly before-tax cash savings due to acquiring the new vans amounts to about $4,400 each. If your cost of capital is 12 percent and your firm faces a 21 percent tax rate, what will the cash flows for this project be? (Round your answers to the nearest dollar amount.)