Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Economics [Excel] You bought a used electric car 3 years ago for $30,000. For the past 3 years, it had a uniform annual depreciation of

image text in transcribed
image text in transcribed
Economics [Excel] You bought a used electric car 3 years ago for $30,000. For the past 3 years, it had a uniform annual depreciation of SlOOO/year only since the value remained stable. From the current year, the car will depreciate by $3,000/year and you want to find the best time to sell from today. Your estimated annual operating cost is $1,000 one year from now and will increase by 20% per year as the car becomes old. The annual average cost for electric recharge is $500. Calculate the economic service life of the car from now. Assume an annual effective interest rate of 10%. Note that you want to sell the car Within a maximum of 9 years from today when its salvage value will become 0. [15 pts]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics

Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward

5th Edition

1337106666, 978-1337106665

More Books

Students also viewed these Economics questions

Question

Do not come to the conclusion too quickly

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago