The Honda Civic Hybrid is a variation of the Honda Civic with a hybrid electric powertrain....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Honda Civic Hybrid is a variation of the Honda Civic with a hybrid electric powertrain. Honda introduced the Civic Hybrid in Japan in December 2001. In the United States, it was the first hybrid automobile to be certified as an Advanced Technology Partial Zero-Emissions Vehicle (AT- PZEV) from the California Air Resources Board. The Civic Hybrid uses an Integrated Motor Assist hybrid system similar to that of the Honda Insight. Early models from 2001 to 2005 used a 5-speed manual transmission, whereas later models feature a continuously variable automatic transmission. The Civic Hybrid was only marketed in sedan configurations until 2013, when Honda introduced a hatchback version. In February 2009, Honda reported that since 2001 they had sold more than 255,000 Civic Hybrids, including more than 190,000 units sold in North America. For a time, the Civic Hybrid was the second best-selling hybrid electric car in the U.S. Honda Malaysia offers finance packages to its new car purchasers. The new car market is highly competitive, and Honda Malaysia management think that they could boost sales of the Honda Civic hybrid if they offer finance at an annual interest rate of 3%, compounded monthly. However, Honda Malaysia pays its bank 4.5% per annum, compounded monthly, for the funds required. Therefore, the price of the Honda hybrid needs to be carefully determined to compensate for this discrepancy in interest rates. A buyer bought a Honda civic hybrid 1.5L at the end of 2009 at a price of RM 116 311.50. The buyer paid a down payment of RM 6300 and the remainder was financed at 3% per annum compounded monthly. He started paying his first installment in January 2010. i. ii. a) The buyer pays equal monthly payments over 5 years to discharge the debt. Calculate the size of each monthly repayment. (4M) By using EXCEL, set up an amortization schedule (table) for the 5 years loan. Print and scan this table together with your answers for submission. (5M) iii. Calculate what the monthly repayments would be if the loan was interest-free and compare. Does your answer seem reasonable? (4M) b) Given that Honda Malaysia's cost of capital is 4.5% per annum compounded monthly, what is the amount loan they took from the bank for this customer? What can you conclude? c) To spur economy growth, the interest rates were reduced in January 2013. The bank announced that the interest rate on the car loan will drop to 2.5% compounded monthly. i. ii. How will this affect the buyer? You need to show all the necessary working and explain the findings as compared to part (a), in terms of monthly payments and interest. Re do excel amortization schedule (make changes based on your table in part a(ii). Print and scan this excel table together with your answers for submission. (11M) The buyer had a fixed deposit of RM 10000 and decided to use this cash to help him pay up the loan after 36 months. This means that he will be able to finish paying his loan faster. How long will he take to finish paying the loan? In your opinion, do you think that this is a wise step to take? Explain. (14M) The Honda Civic Hybrid is a variation of the Honda Civic with a hybrid electric powertrain. Honda introduced the Civic Hybrid in Japan in December 2001. In the United States, it was the first hybrid automobile to be certified as an Advanced Technology Partial Zero-Emissions Vehicle (AT- PZEV) from the California Air Resources Board. The Civic Hybrid uses an Integrated Motor Assist hybrid system similar to that of the Honda Insight. Early models from 2001 to 2005 used a 5-speed manual transmission, whereas later models feature a continuously variable automatic transmission. The Civic Hybrid was only marketed in sedan configurations until 2013, when Honda introduced a hatchback version. In February 2009, Honda reported that since 2001 they had sold more than 255,000 Civic Hybrids, including more than 190,000 units sold in North America. For a time, the Civic Hybrid was the second best-selling hybrid electric car in the U.S. Honda Malaysia offers finance packages to its new car purchasers. The new car market is highly competitive, and Honda Malaysia management think that they could boost sales of the Honda Civic hybrid if they offer finance at an annual interest rate of 3%, compounded monthly. However, Honda Malaysia pays its bank 4.5% per annum, compounded monthly, for the funds required. Therefore, the price of the Honda hybrid needs to be carefully determined to compensate for this discrepancy in interest rates. A buyer bought a Honda civic hybrid 1.5L at the end of 2009 at a price of RM 116 311.50. The buyer paid a down payment of RM 6300 and the remainder was financed at 3% per annum compounded monthly. He started paying his first installment in January 2010. i. ii. a) The buyer pays equal monthly payments over 5 years to discharge the debt. Calculate the size of each monthly repayment. (4M) By using EXCEL, set up an amortization schedule (table) for the 5 years loan. Print and scan this table together with your answers for submission. (5M) iii. Calculate what the monthly repayments would be if the loan was interest-free and compare. Does your answer seem reasonable? (4M) b) Given that Honda Malaysia's cost of capital is 4.5% per annum compounded monthly, what is the amount loan they took from the bank for this customer? What can you conclude? c) To spur economy growth, the interest rates were reduced in January 2013. The bank announced that the interest rate on the car loan will drop to 2.5% compounded monthly. i. ii. How will this affect the buyer? You need to show all the necessary working and explain the findings as compared to part (a), in terms of monthly payments and interest. Re do excel amortization schedule (make changes based on your table in part a(ii). Print and scan this excel table together with your answers for submission. (11M) The buyer had a fixed deposit of RM 10000 and decided to use this cash to help him pay up the loan after 36 months. This means that he will be able to finish paying his loan faster. How long will he take to finish paying the loan? In your opinion, do you think that this is a wise step to take? Explain. (14M)
Expert Answer:
Answer rating: 100% (QA)
a Monthly Repayment Calculation i The formula for calculating the monthly repayment EMI can be expre... View the full answer
Posted Date:
Students also viewed these programming questions
-
The Honda Civic Hybrid vehicle, powered by gasoline-electric technology, gets 49 miles per gallon (mpg) in city driving and 51 mpg in highway driving (Source: Honda.com). The car is driven 447 mi on...
-
A strip is a variation of a straddle involving two puts and one call. Construct a short strip using the August 170 options. Hold the position until the options expire. Determine the profits and graph...
-
The Horner-Emmons modification is a variation of a Wittig reaction in which a phosphonate-stabilized carbanion in used instead of a phosphonium ylide. The phosphonate-stabilized carbanion is prepared...
-
Kellogg Company is expected to pay $2.00 in annual dividends to its common shareholders in the future. Our best estimate of the expected cost of equity capital is 5.0% and the expected growth rate in...
-
Compare one-way communication and two-way communication.
-
How is a firms degree of combined leverage (DCL) related to its degrees of operating and financial leverage?
-
Creusot-Loire, a French company, was the project engineer for the construction of ammonia plants in former Yugoslavia and Syria. Creusot-Loire contracted with Coppus Engineering for the purchase of...
-
Estimating a cost function The controller of the Ijiri Company wants you to estimate a cost function from the following two observations in a general ledger account called Maintenance: Required1....
-
15. If y = 3x-4x+2 then slope at x = 1 is: (1) 1 (2) 2 (3) 4 (4) -2 16. sin240 = ? (1) - 2 (3) 3 1/2 17. Value of sin 2 is (4) (2) 12 (1) 23 (2) (3) 90 180 (4) 0 18. The rate of mass of the gas...
-
Consider the data in Figure 5.25 for Deb?s Dance Studio: Adjustment Data 1. Insurance expired, $1,000. 2. Dance supplies on hand, $1,100. 3. Depreciation on dance equipment, $2,500. 4. Salaries...
-
The yen moved from 110 yen per dollar to 130 yen per dollar over one year. What is the continuously compounded rate of depreciation of the yen against the dollar?
-
(A) Explain why a provision may be made for doubtful debts. (B) Explain the procedure to be followed when a customer whose debt has been written-off as bad subsequently pays the amount originally...
-
An investment bank offers a derivative whose payoff at maturity T is given by S 2 T , where ST is the price of the underlying asset, a non-dividendpaying stock share with a price following a GBM....
-
Paige, Social Security number 111-22-3333, is the vice president of marketing (Australia) for International Industries, Inc. (III). III is headquartered at 123 Main Street, Los Angeles, California...
-
Indicate whether the following items would appear on the income statement (IS), statement of financial position (SFP), or retained earnings statement (RES). a. Dividends. b. Cash. c. Salaries and...
-
Which of the following is true? a. In the United States, the primary corporate shareholders are financial institutions. b. Share capital means total assets under GAAP. c. Under both IFRS and GAAP,...
-
How do people perceive the healthiness of Coca Cola drinks? Discuss: the introduction the literature review the conceptual background
-
How can you tell from the vertex form y = a(x - h) 2 + k whether a quadratic function has no real zeros?
-
Why do you and your business need to be able to communicate well?
-
What are the basic criteria for effective messages?
-
What are the questions for analyzing a business communication situation?
Study smarter with the SolutionInn App