If JTM's WACC is 7.0%, should it accept the financing offer? Why yeas or No? 1 2

If JTM's WACC is 7.0%, should it accept the financing offer? Why yeas or No? 

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 A 30 31 32 B E JTM is considering purchasing a new 3-D printer costing $665,000. The manufacturer is offering a payment plan in which JTM pays 10% down and finances the rest over 24 months at $27,000/month. What is the implicit financing rate? If JTM's WACC is 7.0%, should it accept the financing offer? Cash price Down payment Monthly payment Cash price minus down payment H Price 665,000 66,500 27,000 Mo. 1 Mo. 2 Mo. 3 Mo. 4 Mo. 5 Mo. 6 Mo. 7 Mo. 8 Mo. 9 Mo. 10 Mo. 11 Mo. 12 Mo. 13 Mo. 14 Mo. 15 Mo. 16 Mo. 17 Mo. 18 Mo. 19 Mo. 20 Mo. 21 Mo. 22 Mo. 23 Mo. 24 Cash Flows 598,500 (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) Implicit cost of credit 15.5% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 A 30 31 32 B E JTM is considering purchasing a new 3-D printer costing $665,000. The manufacturer is offering a payment plan in which JTM pays 10% down and finances the rest over 24 months at $27,000/month. What is the implicit financing rate? If JTM's WACC is 7.0%, should it accept the financing offer? Cash price Down payment Monthly payment Cash price minus down payment H Price 665,000 66,500 27,000 Mo. 1 Mo. 2 Mo. 3 Mo. 4 Mo. 5 Mo. 6 Mo. 7 Mo. 8 Mo. 9 Mo. 10 Mo. 11 Mo. 12 Mo. 13 Mo. 14 Mo. 15 Mo. 16 Mo. 17 Mo. 18 Mo. 19 Mo. 20 Mo. 21 Mo. 22 Mo. 23 Mo. 24 Cash Flows 598,500 (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) Implicit cost of credit 15.5%

Answer rating: 100% (QA)

In the image provided JTM is considering a financing offer for a new 3D printer which costs 665000 The payment plan involves paying 10 down and then f... View the full answer