Izzy is thinking about leasing a sports car.She will make monthly payments based on a money factor and the

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The monthly payments for a car lease are based on the capitalized cost of the car, which is the negotiated price of the vehicle. Therefore, choice D, capitalized cost, is the best option. The money factor is a decimal number that affects the leasing cost, but it is applied to the capitalized cost to determine the lease payment. The invoice price, sticker price, and set price may be used to negotiate the capitalized cost, but they do not directly affect the lease payment. The residual value is the estimated value of the car at the end of the lease term and affects the depreciation component of the lease payment, but it is not used to calculate the base payment.

Izzy Is Thinking About Leasing a Sports Car