Question
Jims 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it roadworthy again. His friend, Julie, suggested that he buy a 5-year-old used Honda
Jims 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it roadworthy again. His friend, Julie, suggested that he buy a 5-year-old used Honda Civic instead for $3,000 cash. Julie estimated the following costs for the two cars:
Geo Prizm Honda Civic
Acquisition cost $15,000 $3,000
Repairs $ 3,000 ---
Annual operating costs
(gas, maintenance, insurance) $ 2,280 $2,100
The cost NOT relevant for the decision (i.e., keeping the Geo Prizm or buying the Honda Civic) is
A. | the acquisition cost of the Geo Prizm. | |
B. | the annual operating costs of the Honda Civic. | |
C. | the repair costs of the Geo Prizm. | |
D. | the acquisition cost of the Honda Civic. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started