Assume you own a clunker that needs some repairs. You are wondering if you should repair your clunker or buy a new car. Information about the two investments follows. Your assignment is to find the net present costs of the two options and compare them based on their annuity equivalents.

Item	clunker	New car
	$3,000 (price at which you could sell your clunker)	$24,000 (new car price)
Miles driven per month	1000/month	1000/month
Repair/maintenance costs per mile	.14/miles	.03/mile
Miles per gallon (assume gas=$3/gal)	17 miles/gallon	27 miles/gallon
Insurance costs/mile	.10/miles	.12/mile
economic life	24 months	120 months
Salvage value	375
Interest rate/year	12%	12%
Net present cost (NPC)	$	$