1. Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to bereplacedandthereareseveralotherrepairsthatneedtobedone.Thecarisnearing theendofitslife,sotheoptions are to either overhaul the car or replace it with a new car. Pompeii's has put together the followingbudgetary items:

Present Car New Car Purchase cost new $31,000 Transmission and other repairs $ 8,500 Annual cash operating cost 12,500 10,000 Fair market value now 5,000 Fair market value in five years 500 5,000