Suppose you want to buy a Tesla Model S,the world's leading all-electric,zero-emission car that has a 265-mile range and can be recharged in three hours.The Tesla Model S Performance model has a list price of $87,500.However,you want several options (Performance Plus Package,red multicoat armor paint,Tech Package,Sound Studio Package,home charging station,performance wheels,and others)that will cost $17,500.An extended warranty will add an additional $5,000.However,if you put $50,000 down now and finance the balance over the next year,you will receive a dealer rebate of $5,000 off the list price.The dealer will give you a $7,000 trade-in allowance for your 2010 Honda Civic DX four-door sedan.In addition,you will have to pay a state sales tax of $10,000,an auto registration fee of $1,000 to the state,and a $1,000 destination charge to ship and prep the car.But because the Tesla Model S is an alternative energy vehicle,you qualify for a $2,500 state rebate and a $7,500 federal tax credit! Finally,your total finance charge is $7,000.Applying the price equation,what is your final price for the Tesla Model S?
A)$57,000
B)$68,000
C)$87,500
D)$107,000
E)$151,000

Question

Quizplus · Accepted Answer

Final price = $87,500 − [($5,000 Dealer rebate + $2,500 State rebate + $7,500 Federal rebate)+ $7,000 Trade-in allowance] + [$17,500 Options + $5,000 Extended warranty + $1,000 Auto registration fee + $1,000 Destination charge + $10,000 State sales tax + $7,000 Finance charge] = $107,000.NOTE: Ignore the down payment of $50,000-it is used to calculate and lower the finance charge but doesn't affect the list or quoted price of $87,500,which means that the final price of $107,000 is not reduced by $50,000 to arrive at a final price of $57,000!

Suppose You Want to Buy a Tesla Model S,the World's