Order the answer to: After deciding to buy a new car, you can either

Order the answer to: After deciding to buy a…

Question	After deciding to buy a new car, you can either lease the car or purchase it on a three-year loan. The car you wish to buy costs $32,000. The dealer has a special leasing arrangement where you pay $1,200 today and $469 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at an APR of 6 percent. You believe you will be able to sell the car for $19,000 in three years. Should you buy or lease the car? What break-even resale price in three years would make you indifferent between buying and leasing?
Subject	business-corporate-finance

Question

After deciding to buy a new car, you can either lease the car or purchase it on a three-year loan. The car you wish to buy costs $32,000. The dealer has a special leasing arrangement where you pay $1,200 today and $469 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at an APR of 6 percent. You believe you will be able to sell the car for $19,000 in three years. Should you buy or lease the car? What break-even resale price in three years would make you indifferent between buying and leasing?

Subject

business-corporate-finance

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