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Since your townhouse will be in the suburbs you'll need a car. You will consider either a Hyundai Elantra that costs $20,655 or a Honda
Since your townhouse will be in the suburbs you'll need a car. You will consider either a Hyundai Elantra that costs $20,655 or a Honda Insight that costs $24,125. Taxes and dealer preparation charges add $2,070 to the Hyundai's cost and $2,410 to the Honda's cost. Maintenance and operating costs will be $700 less each year for the Honda during your six-year holding period. At the end of your holding period you believe that you can sell the Hyundai for $7,000 and the Honda for $8,700. Using a required rate of return of 10 percent and incremental rate of return analysis, which car is the better choice? Walking, biking or public transportation is not an option
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