A car rental firm is considering how long it should keep a car which cost 1000. It
Question:
A car rental firm is considering how long it should keep a car which cost £1000. It constructs the following cash forecast for the first five years of the car's life:
Possible life (in years)
o 234 5 Rental income p.a.
Repairs p.a.
Residual value
£
1000
£
1500 650
£
1500 200 600
£
1000 400 550
£
1500 800 500
£
1000 1000 400
(a) Make whatever assumptions you consider necessary and explain the length of time you would recommend the firm to keep the car.
(b) Explain and justifY the assumptions you made.
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Shehar bano
I have collective experience of more than 7 years in education. my area of specialization includes economics, business, marketing and accounting. During my study period I remained engaged with a business school as a visiting faculty member and did a lot of business research. I am also tutoring and mentoring number of international students and professionals online for the last 7 years.
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