Your Prospective Client Plans to Purchase an Automobile with a Total

question 4

Multiple Choice

Your prospective client plans to purchase an automobile with a total "drive-out" cost of $32,000.The down payment will be $5,000.The balance of the purchase price will be financed at an annual interest rate of 3.5 percent for a period of five years.What will be the annual payments to the lender?

• A)-4,978.50.
• B)4,978.50.
• C)-5,979.99.
• D)5,979.99.

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Definitions:

Invoice Approval Form

Used by the accounting department in checking the invoice and finally approving it for recording and payment.

Purchasing Department

A division within a business that is responsible for acquiring goods and services that are necessary for the company's operations.

Accounting Department

The division within a business that manages financial records, processes transactions, and ensures compliance with financial regulations.

F.O.B. Shipping Point

A term used in shipping contracts indicating that the buyer is responsible for paying shipping costs and bears the risk of the goods once they are shipped by the seller.