Register now or log in to join your professional community.
I am not agree with all answers, because it we must calculate it by following:
What is PV of our payments and compare it with (revenue what we receive by using car), it's usually equals cost of market price of rent this car .
If revenue is more than PV it means that debt is good.
PV = FV / (1+r)n
Debit is only good, when we have to move first in the market and then it is beneficial and easy to pay it back easily. Else debt is a equity eater.
Yes a debt is good to acquire assets if the expected interest will decrease over time, or if the future value of the acquired asset increases...So, you can sell the asset at a higher price and make profit.This situation is vice-versa, meaning that the opposite is also true.Therefore to make a good decision, you have to look at the expected interest rates in the market and to the future value of the assets.
No sir, i don't support the concept of debt because of the interest.
Generally, when the benefit exceeds cost, then it is good. We have to consider the cost of borrowing before we resort to purchases on installment. Because without us knowing, we might already be paying for a very unreasonable price which has gone unnoticed because it was spread over a period of time. This applies to both business and personal situations.
I agree for some kind of loans which considered a good loans, such as Student/Education Loans, a good reliability cars (Toyota/Honda) with 4/5 year loans, and a low interest home loans. For example, based on my life loans, In 2001 I purchased a 2001 brand new Honda Civic with a 4 years fixed interest loan and I have already paid it off in the year of 2005 and still using it up to this moment by enjoying a free car payments and a good reliability car with trouble free. Also, I have already paid off my student loans within a 10 years of my graduation based on a low fixed interest in 10 years period.
Yes. It increases the outlay of funds.
Thanks for the invitation.
YES, with a very low interest rate.
As it is described here this debt should be a good one
Nice formula given by Mr Shota
