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I like driving small cars and I buy nearly identical ones whenever the old one needs replacing. Typically, I trade in my old car for
I like driving small cars and I buy nearly identical ones whenever the old one needs replacing. Typically, I trade in my old car for a new one costing about $20000. Standard maintenance and repair costs are expected to be $500 in the first year (at the end of the year), $750 in the second year, increasing by $500 per year thereafter. Assume interest is 8% and straight line depreciation with a salvage value for the vehicle of $4000 after four years. a. Calculate the EAC TOTAL for YEAR 2. Round your answer to the nearest dollar. EAC EAC EAC Year Salvage Total Maintenance XXXXXXXXXXXXXX Capital Maintenance XXXXXXXXXXXXXXXXXXXXXXXXXXX 0 $20,000 XXXXXXXXX 1 w IN 4
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