1. Using the annualized cost method, calculate the total annual costs for three different automobiles based on the following information and assumptions (15 points):

		Car A		Car B		Car C
Initial Cost		$39,600		$21,000		$24,000
Sales Tax		5.25%		5.25%		5.25%
Trade-In		$17,400		$8,000		$9,500
Annual Insurance		$930		$470		$650
Miles/ gallon		18		24		15
Maintenance/ Yr		$350		$200		$150
Tire Replacement		$800		$500		$600

Owner trades every four years, interest on money is 6%, gasoline is $3.50 per gallon, the user drives 16,000 miles per year and the tires are replaced every 24 months. For simplicity, assume all money spent during a given year is actually spent at the end of the year. (This eliminates fractions of a year.)

2. Using the same information (above), calculate the total costs using the present worth method.