A car has a sticker price of $94,000.The car has a 100 hp engine and can...

A car has a sticker price of $94,000.The car has a 100 hp engine and can accelerate from 0 to 60 mph in 15.8 seconds. The lease rate is 3.7%. The term of the lease is three years. The buyout is $45,120 at the end of the lease. Assume that the lease has three annual payments with the first payment due on signing.

a) What are the before-tax lease payments assuming no down payment?

b) With leases, sales tax is paid on the lease payments and buyout. If the sales tax rate is 10%, then what is the present value of the taxes paid on the lease when discounted at the lease rate?

Expert Solution

Rahul Sunny answered 2 years ago

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