. David purchased a new SUV for $45,000. He put $8,000 down and financed the $37,000...
. David purchased a new SUV for $45,000. He put $8,000 down and financed the $37,000 balance over 6 years. What is the impact of this transaction on his net worth?
a. His net worth remains the same.
b. His net worth increases.
c. His net worth decreases.
d. Impossible to know.
Homework Answers
His NW has decreased. As now David will have to pay the time Value of money for Car Financing which we be more than the Value of the Car as of now.
Option c is correct.
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