1. Select a used vehicle model year 2018 or older that you are interested in purchasing....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Select a used vehicle model year 2018 or older that you are interested in purchasing. While price is important, other factors must also be considered; such as reliability, cost of repair/maintenance, fuel efficiency, and factors which will affect your insurance premiums. a) You must submit a copy of the listing of the vehicle. Each student should have a different chosen vehicle. b) You must also provide a rationale for your choice of vehicle considering the factors listed above and others you consider important. State all of your assumptions in writing, with explanation/justification. c) Please provide evidence of your research and reference your sources. You may also need to do some additional research. 2. 3. 4. Assume a 10% down payment. Calculate the loan payment on the remaining amount (total price -10% down payment) if paid monthly over 4 years. Assume a car loan rate of 8% compounded semi-annually. (10 marks) You can refer to your notes from Math of Finance (Math 10037) if you choose to do the calculations by hand. (You can also find a formula sheet posted in Canvas to assist you with these calculations). Otherwise, the following format, may help refresh your memory of the calculator functions for this step: Set your BAll Plus Calculator to END. Set your P/Y = 12 for monthly payments Set your C/Y = 2 for semi-annual compounding PV = The initial amount of your car loan (= purchase price-down payment) FV=Zero (in the future your loan balance will be completely repaid) N = 48 (4 years x 12 monthly payments) 1/Y=8 CPT PMT=Your loan payment. Make the following assumptions: Your future income = $45,000/year You pay $1000/month in rent You have a cell phone bill of $85/month You have a student loan payment of $200/month You have a VISA card with a $1000 limit and $1000 outstanding balance Car insurance will cost $4000/year Groceries cost you $100/week Gas will cost you $50/week You have no other expenses. Calculate your TDSR given the above-mentioned assumptions and including the new loan payment you just calculated. (12 marks) Would you qualify for this purchase? (2 marks) When TDSR exceeds the maximum allowable limit, what are four options that you could consider based on your spending above? (8 marks) 5. Your professor (who currently drives a practical, family-friendly Mazda) is going through a midlife crisis and announces to the class that she is going to buy a 2020 Ferrari 488 Spider with a sticker price of over $300,000 and that will be the answer to all of life's problems. Explain three concerns you have about this purchase from a wealth management perspective (3 marks) Upon completion of this assignment, you will be able to: • Identify features of a used vehicle that affect your purchase decision; Identify factors that affect the cost of automobile insurance; Calculate the monthly amount of a car payment; . . • Calculate TDSR and determine whether you qualify for a car loan; and • Consider the implications of a vehicle purchase from both a risk management and wealth management perspective. Plan for your future car purchase! Assume that you have a goal of purchasing a used car after graduation. Completion of this assignment will require research and multiple calculations. 1. Select a used vehicle model year 2018 or older that you are interested in purchasing. While price is important, other factors must also be considered; such as reliability, cost of repair/maintenance, fuel efficiency, and factors which will affect your insurance premiums. a) You must submit a copy of the listing of the vehicle. Each student should have a different chosen vehicle. b) You must also provide a rationale for your choice of vehicle considering the factors listed above and others you consider important. State all of your assumptions in writing, with explanation/justification. c) Please provide evidence of your research and reference your sources. You may also need to do some additional research. 2. 3. 4. Assume a 10% down payment. Calculate the loan payment on the remaining amount (total price -10% down payment) if paid monthly over 4 years. Assume a car loan rate of 8% compounded semi-annually. (10 marks) You can refer to your notes from Math of Finance (Math 10037) if you choose to do the calculations by hand. (You can also find a formula sheet posted in Canvas to assist you with these calculations). Otherwise, the following format, may help refresh your memory of the calculator functions for this step: Set your BAll Plus Calculator to END. Set your P/Y = 12 for monthly payments Set your C/Y = 2 for semi-annual compounding PV = The initial amount of your car loan (= purchase price-down payment) FV=Zero (in the future your loan balance will be completely repaid) N = 48 (4 years x 12 monthly payments) 1/Y=8 CPT PMT=Your loan payment. Make the following assumptions: Your future income = $45,000/year You pay $1000/month in rent You have a cell phone bill of $85/month You have a student loan payment of $200/month You have a VISA card with a $1000 limit and $1000 outstanding balance Car insurance will cost $4000/year Groceries cost you $100/week Gas will cost you $50/week You have no other expenses. Calculate your TDSR given the above-mentioned assumptions and including the new loan payment you just calculated. (12 marks) Would you qualify for this purchase? (2 marks) When TDSR exceeds the maximum allowable limit, what are four options that you could consider based on your spending above? (8 marks) 5. Your professor (who currently drives a practical, family-friendly Mazda) is going through a midlife crisis and announces to the class that she is going to buy a 2020 Ferrari 488 Spider with a sticker price of over $300,000 and that will be the answer to all of life's problems. Explain three concerns you have about this purchase from a wealth management perspective (3 marks) Upon completion of this assignment, you will be able to: • Identify features of a used vehicle that affect your purchase decision; Identify factors that affect the cost of automobile insurance; Calculate the monthly amount of a car payment; . . • Calculate TDSR and determine whether you qualify for a car loan; and • Consider the implications of a vehicle purchase from both a risk management and wealth management perspective. Plan for your future car purchase! Assume that you have a goal of purchasing a used car after graduation. Completion of this assignment will require research and multiple calculations.
Expert Answer:
Answer rating: 100% (QA)
Scenario A Let value of car is Rs 100000 down payment 10 Rs 10000 Interest 8 pm 81... View the full answer
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
Posted Date:
Students also viewed these programming questions
-
2017 Subaru Legacy Sedan 4 cyl 4 Door Sedan with 136,300 miles. The customer complaint is that when they put their Right Directional on it has a steady clicking/blinking sound coming from their...
-
When you have completed this application, you will be able to: Complete Business Proposals and Business Reports - See Objectives for each chapter 12 and 13 outlined in the course textbook....
-
A job order costing system is used when a company produces a product or provides a service that is unique-that is, the cost of one product or service is different than that of another. A job order...
-
Fletcher Fabrication, Inc., produces three products by a joint production process. Raw materials are put into production in Department X, and at the end of processing in this department, three...
-
Electronic reading devices are hot, and Amazon's Kindle and Apple's iPad are in a heated battle to win over the bookworms of the world. Kindle focuses solely on reading, whereas iPad does reading,...
-
Hasbro and Mattel, Inc., are the two largest toy companies in North America. Condensed liabilities and stockholders' equity from a recent balance sheet are shown for each company as follows (in...
-
Use Table 1, or software, to find (a) \(B(8 ; 16,0.40)\); (b) \(b(8 ; 16,0.40)\); (c) \(B(9 ; 12,0.60)\); (d) \(b(9 ; 12,0.60)\); (e) \(\sum_{k=6}^{20} b(k ; 20,0.15)\); (f) \(\sum_{k=6}^{9} b(k ;...
-
Xemex has collected the following inventory data for the six items that it stocks: Lynn Robinson, Xemexs inventory manager, does not feel that all of the items can be controlled. What ordered...
-
A company produces and sells a single product. The standard cost card for that product follows: Direct Materials Standard Quantity 2 feet Standard Price/Rate Direct Labor Variable Overhead Fixed...
-
a. Cyclotron resonance for a spheroidal energy surface. Consider the energy surface e(k) = h 2m, (k+ k k 2m where m, is the transverse mass parameter and m, is the longitudinal mass parame- ter. A...
-
Purple Berhad's production manager is putting together a capital appraisal to replace a machinery in the Batu Maung factory and has sought your advice. Current machinery Purchased 4 years ago for...
-
purposes. Revenue Employee salaries and wages Servicing materials Other expenses Fixed Element per Month Variable Element per Well Serviced $4,000 $43,800 $ 1,000 $ tA 600 $38,200 A total of 42 wells...
-
Let f(x) = = = 2x + 5 and g(x) = 9x 4. Find the function f g. (f - g)(x) = Find the domain. (Enter your answer using interval notation.)
-
On the statement of cash flows, if inventory decreases: Select one: a. it is a source of cash, since the firm is selling inventory b. it is a source of cash, since the firm is buying inventory that...
-
Write an equation of the line that passes through (5,-2) and is perpendicular to the line defined by x-3y=1. Write the answer in slope-Intercept form (If possible) and in standard form (Ax+By C) with...
-
Solve the equation. Write the solution set with the exact solutions. 5 log (7w+1)+3 = 13 If there is more than one solution, separate the answers with commas. There is no solution, {}. The exact...
-
1. In your opinion, which of the Seven Myths of social media is most believed by people and why? Explain your reasons. 2. Which of the Listen and Observe Stages do you think is the most difficult to...
-
Drainee purchases direct materials each month. Its payment history shows that 65% is paid in the month of purchase with the remaining balance paid the month after purchase. Prepare a cash payment...
-
The TLB Yogurt Company must be able to make 600 party cakes in a 40-hour week. Use the following information to draw and label a precedence diagram, compute cycle time, compute the theoretical...
-
Describe the process of manually crashing a project network.
-
Kellys Tavern buys Shamrock draft beer by the keg from a local distributor. The bar has an annual demand of 900 kegs, which it purchases at a price of $60 per keg. The annual carrying cost is $7.20,...
-
If a politician running for office does not speak in general terms, does not try to move to the middle of the political spectrum, and does not take polls, is the median voter model therefore wrong?
-
Voters often criticize politicians running for office who do not speak in specific terms (i.e., who do not specify which spending programs will be cut, whose taxes will be raised, etc.). If voters...
-
Why is rent-seeking activity socially wasteful?
Study smarter with the SolutionInn App