A man had to have the muffler replaced on his 2-yearold car. The repairman offered two alternatives.
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A man had to have the muffler replaced on his 2-yearold car. The repairman offered two alternatives. For $50 he would install a muffler guaranteed for 2 years. But for $65 he would install a muffler guaranteed "for as long as you own the car." Assuming the present owner expects to keep the car for about 3 more years, which muffler would you advise him to have installed if you thought 20% were a suitable interest rate and the less expensive muffler would only last 2 years?
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Compute the PW of Cost for a 25year analysis period Note that in both cases the annual maintenanc...View the full answer
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