2. Tony wants a new car but cannot afford it. What advantage would Tony have if he leased a car? 1. The lease down payment is usually more expensive than a down payment of a purchased vehicle.
2. Lease payments are typically higher than if the car was purchased.
3. Leases are better for a person's credit so that he can get a better car.
4. Leasing often allows the buyer to drive a more expensive vehicle.

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan