Kevin and Claire have a house on several wooded acres. They heat their home largely by burning firewood that is delivered to them by the cord (a large quantity of wood). Kevin feels that if they owned a wood splitter, he could cut up and split their own firewood and save the several hundred dollars per year they now spend on firewood. The cost of a good, gasoline- powered wood splitter is $4,000, which could be financed at eight percent. They figure that the machine would last eight years and then would be worthless. They also calculate that fuel for the machine would cost $30 per year and that repairs would average $50 per year over the eight years that they would own it. On average, what would their annual cost be to own the wood splitter? Annual Cost Depreciation $100.00 Installment Loan Interest $140.00 Operating costs $50.00 Repairs $20.00 Total $310.00 Ar Installment Loan Interest $140.00 Operating costs $50.00 Repairs $20.00 Total $310.00 O A. $80 B. $820 OC. $860 D. $900 7 of 10 Back Answer Kevin and Claire have a house on several wooded acres. They heat their home largely by burning firewood that is delivered to them by the cord (a large quantity of wood). Kevin feels that if they owned a wood splitter, he could cut up and split their own firewood and save the several hundred dollars per year they now spend on firewood. The cost of a good, gasoline- powered wood splitter is $4,000, which could be financed at eight percent. They figure that the machine would last eight years and then would be worthless. They also calculate that fuel for the machine would cost $30 per year and that repairs would average $50 per year over the eight years that they would own it. On average, what would their annual cost be to own the wood splitter? Annual Cost Depreciation $100.00 Installment Loan Interest $140.00 Operating costs $50.00 Repairs $20.00 Total $310.00 Ar Installment Loan Interest $140.00 Operating costs $50.00 Repairs $20.00 Total $310.00 O A. $80 B. $820 OC. $860 D. $900 7 of 10 Back