A family now has four kids, and their subcompact car just is not big enough for the kids and dog. They do not have a lot of money, so they will buy a used vehicle. They have three mutually exclusive options listed below. Assuming that the vehicles are available in the future with the same associated costs, the annual cost of Minivan B is closest to which value? Assume that one will keep Minivan A 6 yrs, Minivan B 3 yrs, and SUV C 5 years. Assume i = 10%. Purchase Price Yearly Maintenance, Gas Cost, Insurance, etc Salvage O a. -$3600 O b.-$3700 Oc. -$3800 O d. -$3600 O e, answer not given. Minivan A Minivan B SUV C $4,500 $8,000 $2,500 $2,000 *** $2,000 $10,000 $2,000 $4,500 $4,000
A family now has four kids, and their subcompact car just is not big enough for the kids and dog. They do not have a lot of money, so they will buy a used vehicle. They have three mutually exclusive options listed below. Assuming that the vehicles are available in the future with the same associated costs, the annual cost of Minivan B is closest to which value? Assume that one will keep Minivan A 6 yrs, Minivan B 3 yrs, and SUV C 5 years. Assume i = 10%. Purchase Price Yearly Maintenance, Gas Cost, Insurance, etc Salvage O a. -$3600 O b.-$3700 Oc. -$3800 O d. -$3600 O e, answer not given. Minivan A Minivan B SUV C $4,500 $8,000 $2,500 $2,000 *** $2,000 $10,000 $2,000 $4,500 $4,000
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.6P
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Transcribed Image Text:A family now has four kids, and their subcompact car just is not big enough the kids and dog. They do not have a lot of money, so they will buy a used vehicle. They have three mutually exclusive options listed below. Assuming that the vehicles are available
in the future with the same associated costs, the annual cost of Minivan B is closest to which value? Assume that one will keep Minivan A 6 yrs, Minivan B 3 yrs, and SUV C 5 years. Assume i = 10%.
Purchase Price
Yearly
Maintenance, Gas
Cost, Insurance,
etc.
Salvage
O a. -$3600
O b.-$3700
O c. -$3800
O d. -$3600
O e. answer not given
Minivan A
$10,000
$2,000
$4,500
Minivan B
$4,500
$2,500
$2.000
SUV C
$8,000
$2,000
$4,000
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