PENDING PLEASE CLOSE! (New England Only) Killer deal on a loaded Tacoma - MSRP $41xxx 24/10K - $249/month + Tax ; First, Plates and MSDs DAS

Doug,
On the one hand you say NPV is more appropriate and then flip-flop to a simple ROI. Which one is it? Actually, I computed the IRR, not an ROR. There is a difference among ROR, ROI, and IRR.
Deciding what discount rate to use to compute the NPV is often subjective.
Although your suggestion has some merit, I’m not talking about 401k contributions or any other type of investment. If you know of any investment that yields an after tax IRR of 30.4%, please share and I’ll get right on it!
I’m simply restricting the discussion to the lease and the implicit rate of return one would achieve as a result of paying MSD’s to lower the lease rate… nothing more. No need to discuss a 401k which is a completely different topic. However, it is certainly an alternative to MSD’s.
You also stated…

In NPV terms, if you were to contribute the $2025 pretax to a 401k (in a 1 time lump sum), and assume you’re in a 24% tax bracket, your NPV on the MSD’s is only +$200, less if you assume compounding interest on the 401k contribution.

Frankly, I have no idea what you’re talking about and I’m a mathematician and an actuary. I want to see you calculation. How did you arrive at an NPV on the MSD’s of only +$200? Please elaborate and include your underlying assumptions including discount rate.

I said NPV was better and showed an example. No clue what you’re referring to here.

So why did you call it Return on Revenue if you know there is a difference?

Of course it is, that’s why I used one’s federal tax bracket as one example

So you invest $3-5k+ without doing any due diligence if your money can work better for you somewhere else in your financial situation?

Discount rate is federal tax bracket (I’m not even including state), values would be ~$2k out, 50 in each month for 24 months, and ~2k in at the end. It’s about as basic as you can get.

Hope this helps.

I never called it any such thing… FYI… ROR within the given context means Rate of Return, not Return on Revenue.

Then, you said this…

I said NPV was better and showed an example. No clue what you’re referring to here.

Yes, but you also said…

“*I think a more appropriate calculation would be NPV, or even perhaps a simple ROI.”

Then, there was this…

Of course it is, that’s why I used one’s federal tax bracket as one example

The MTR is inappropriate. You should use the Marginal Effective Tax Rate as it is more accurate
and usually lower than the MTR. Regardless, your whole approach to this problem is wrong.

You also said this…

So you invest $3-5k+ without doing any due diligence if your money can work better for you somewhere else in your financial situation?

Doing my due diligence? Do you know the OP’s financial situation? I sure don’t. I was merely looking at the merits of investing MSD’s within the confines of the lease. I’m not going to get into a financial planning dissertation with the OP… if he chooses to look at other alternatives, he’s welcome to do that on his own. You’re clearly inappropriate to be discussing other financial alternatives as you know nothing about the OP’s financial position. Hypothetical constructs have their place but, in this instance, I believe they can be confusing for many and do more harm than good. So, why complicate matters unnecessarily? You’re making a mountain out of a mole hill. Seems to me you’re trying to impress us with what you don’t know. What I do know is that you’re not a competent financial analyst, actuary, or mathematician because, if you were, you wouldn’t be saying the things you’re saying.You look foolish to those that know better.

One more thing, you stated…

Discount rate is federal tax bracket (I’m not even including state), values would be ~$2k out, 50 in each month for 24 months, and ~2k in at the end. It’s about as basic as you can get.

Okay, but 2k in and 2k out with 50 each month for 24 months equates to an annual discount rate (IRR) of 30.76% compounded monthly, NOT the 24% MTR that you’re claiming. Actually, PV = 2025, annuity streams (cost savings) = 50 for 24 months, FV = 2025. Result is 30.38% IRR after tax. It doesn’t get much easier than that… Geez, do you even know what a discount rate is?

Wow, can’t even begin to compute how much is wrong here. Take it PM if it’s really important to impress people in a forum. Let him sell the car.

Yup, and it’s all on you.

I think you should take your own advice.

How bout them Red Sox? Think they’ll win the pennant this year?

Someone should buy this truck. Amazing deal in the best color!

3 Likes

They need to get above .500 first! :grinning:

Hahaha

Fair!

Tempting, wrong coast though.

Still waiting on my man Mr @vhooloo

Still have this?

Yes sir. It’s ready to roll!

I’m in San Diego could you ship it here?

I also have my 2016 that needs to be given back. My tags are due would I need to pay those?