Abeds old car requires repairs estimated at $3,000 to make it safe and usable. His sister, Ahlam, suggested that he should buy a used car instead for $3,000 cash. Ahlam estimated the following costs for the two cars:

Repair the existing car

Purchase a used car

Original Cost

$ 15,000

$ 3,000

Repairs

$ 3,000

$ 0

Annual operating costs to run the car

$ 2,280

$ 2,100

Remaining useful life

3 years

3 years

What should Abed do?

a. Purchase the used car because he saves $540

b. Purchase the used car because he saves $180

c. Repair the existing car because he saves $540

d. Repair the existing car because he saves $180