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John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $11,000 to make it roadworthy again. His wife, Sherry, suggested that he should buy a 5-year-old
John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $11,000 to make it roadworthy again. His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $11,000 cash. Sherry estimated the following costs for the two cars: Trail Blazer Grand Cherokee $25,000 $11,000 Acquisition cost Repairs Annual operating costs (Gas, maintenance, insurance) $11.000 $2580 $1900 The cost NOT relevant for this decision is the repairs to the Trail Blazer annual operating costs of the Grand Cherokee acquisition cost of the Grand Cherokee acquisition cost of the Trail Blazer
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