Determining Terms of Automobile Leases (Requires Spreadsheet)
Part a (Base Case)
| Selling Price | |||||
| Age | 1 year | 2 years | 3 years | 4 years | 5 years |
| Resale Price | |||||
| Down Payment | HINT: The down payment reduces the present value (PV) when calculating the lease payment. | ||||
| Cost of Capital | |||||
| Monthly Cost of Capital | 0.0% | ||||
| Lease Calculations | 2yr lease | 3yr lease | 4yr lease | 5yr lease | |
| Lease Term in Months | 24 | 36 | 48 | 60 | |
| Lease Payment |
&F