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Mike is considering buying a luxury car and is interested in computing the incremental costs of an imported car over a domestic car. The costs

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Mike is considering buying a luxury car and is interested in computing the incremental costs of an imported car over a domestic car. The costs are summarized as shown in the table below. Imported Domestic Cost Purchase price Insurance / year Fuel (Based $35,000 $31,000 $600 $550 $1,000 $900 on 15,000 miles/year) Property tax Maintenance $1,250 $1,050 $400 $600 Salvage value after 5 years $15,000 $6,000 Ignoring the time value of money if Mike expects to have an incremental advantage of not less than $2000 on the imported car. should he buy the imported car

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