You have a $200,000.00 budget borrowed (Loan) from a bank, with an interest rate of 4.5% per annum. (Loan Date = January 1, 2018)
Cars purchased must be ONLY New 2018 models, Ford, Chevrolet AND Dodge cars mixed from the Big 3 US Auto manufacturers.
You can reinvest buying new cars from the profits you earn from the original rental car fleet fees; assume 80% of the vehicles will be rented at all times. Assume 1.5% product price increase each year from 2018 models you initially find.
You are the only person employed and have to pay yourself $65,000.00 per year.
Find:
1. The amount of the monthly payment if you want to repay the entire loan in 5 years.
2. How much do you charge per day for the rental of the car class category?
3. Only three categories of cars will be used; compact, medium, and full size cars will be purchased.
4. Allocate the rental price for each category class of car to generate monthly revenue.
5. Provide the list of cars you would purchase and the reason(s) for your purchase; the number of cars in each class category is up to you.
6. Be unique in providing unique cars for your rental company. (Think quality etc.)