Search charts as applicable. Spring $2024$

Question $10$ of $14$

This test: $200$ point$($s$)$ possible

This question: $10$ point$($s$)$ possible

Carfly Barbers decides to lease a second barbershop. The barbershop has a cash price of $$200,000.$ If Carfly borrowed money to purchase the shop, it would incur a $9\%$ interest rate compounded annually.

$($Click the icon to view the Future Value of $$1$ table.$)$

$($Click the icon to view the Present Value of $$1$ table.$)$

$($Click the icon to view the Future Value of an Ordinary Annuity table.$)$

$($Click the icon to view the Present Value of an Ordinary Annuity table.$)$

$($Click the icon to view the Future Value of an Annuity Due table.$)$

$($Click the icon to view the Present Value of an Annuity Due table.$)$

Read the requirement. $($Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, $x.xxxxx.$ Round intermediary currency computations and your final answer to the nearest cent, $$.xx.)$

a$.$ What are the lease payments if the agreement requires eight annual payments beginning today?

If the agreement requires eight annual payments beginning today, the lease payments are

b$.$ What are the lease payments if the agreement requires eight annual payments beginning one year from the agreement date?

The lease payments are $$ if the payments begin one year from the agreement date.

c$.$ What are the lease payments if the agreement requires eight annual payments beginning today and Carfly will be able to buy the barbershop at the end of the eight$-$year lease, paying a $$30,000$ residual value? $($Hint: Subtract the PV of the $$30,000$ residual value from the cash price of the barbershop to determine the payments using present value tables.$)$

If Carfly will be able to buy the barbershop for $$30,000$ at the end of the $8-$year lease, the lease payments are $$