Using the Following Information, What Is the Cost to Buy $\quad$

question 41

Multiple Choice

Using the following information, what is the cost to buy a car? * Down payment $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $\$ 3,000$
* Monthly loan payment $\quad$$\quad$$\quad$$\quad$$\quad$ $\quad \$ 350$ per month for a six-year loan
* Opportunity cost of down payment $\quad$$\quad$ $\$ 3,000 \times$ loan period (in years) $\times 2 \%$ interest
* Estimated value of vehicle at end of ownership period $\$ 4,000$

• A) $3,000.
• B) $21,200.
• C) $24,560.
• D) $25,200.
• E) $28,200.

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing the premium paid for the company's reputation, customer base, or brand identity.

Separate Incorporation

A legal entity distinct from its shareholders or owners, recognized as such by law and capable of rights, privileges, and liabilities.

Parent Company

A company that holds sufficient shares in another business to dictate its management and operations through the power to influence or choose its board of directors.