Edison, who lives in Houston, is trying to decide between the following car models: Brand and Model
Question:
Edison, who lives in Houston, is trying to decide between the following car models:
Brand and Model | Cost |
---|---|
Hyundai Accent | $14,195 |
Mini Cooper | 23,450 |
Jeep Wrangler | 26,790 |
Volvo C70 | 39,950 |
He’s currently accumulated a down payment of $3,000 and he has determined that he can afford maximum payments of $575 per month. His initial research on the current cost of auto loans has found that his lowest cost loan would be made by a bank and would require an interest rate of 12% for four years.
Given this information, the maximum amount that Edison can afford to pay for his new car is , and the most expensive car that he can afford to purchase, without stretching his budget, is:
The Volvo C70
The Mini Cooper
The Jeep Wrangler
The Hyundai Accent
However, he could upgrade to a more expensive model by undertaking several activities. Which of the following activities would allow this upgrade? Check all that apply.
Postpone his purchase until he can save more money for a larger down payment
Go ahead and purchase the more expensive car; he deserves to be happy
Purchase the more expensive car now and then ask his boss for a raise next week
Purchase an upgraded vehicle with fewer and less expensive options
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann