Question: JTM is considering purchasing a 3D printer. The price is $945,000. The dealer is offering a payment plan in which JTM pays 20% down and

JTM is considering purchasing a 3D printer. The price is $945,000. The dealer is offering a payment plan in which JTM pays 20% down and finances the rest over 24 months at $34,450/month.

What is the implicit financing rate? If JTM's WACC is 7%, should it accept the financing offer?

Cash price Down payment Monthly payment 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 Price Cash price minus down payment Mo. 1 Mo. 2 Mo. 3 Mo. 4 Mo. 5 Mo. 20 Mo. 21 Mo. 22 Mo. 23 Mo. 24 945,000 189,000 34,450 Cash Flows Implicit cost of credit #NUM!

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