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5. Deluxe Motors owns a Bobcat skid steer that they bought for $38,000 years ago. Today it is currently worth $21,000. Looking to the future
5. Deluxe Motors owns a Bobcat skid steer that they bought for $38,000 years ago. Today it is currently worth $21,000. Looking to the future they believe it will go down in value by 15% every year. Their operating and maintenance costs for the skid steer will be $1,800 this year and they will increase by $500 every year. Use an interest rate of 10% / yr. What is their marginal cost for year 3? NOTE: Marginal Costs are year-by-year estimates of the costs to own an asset for that year. A. $5,950 B. $6,763 C. $6,593 D. $6,524 5. Deluxe Motors owns a Bobcat skid steer that they bought for $38,000 years ago. Today it is currently worth $21,000. Looking to the future they believe it will go down in value by 15% every year. Their operating and maintenance costs for the skid steer will be $1,800 this year and they will increase by $500 every year. Use an interest rate of 10% / yr. What is their marginal cost for year 3? NOTE: Marginal Costs are year-by-year estimates of the costs to own an asset for that year. A. $5,950 B. $6,763 C. $6,593 D. $6,524
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