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Suppose that you have an old car that is a real gas guzzler. It is 10 years old and could be sold to a local
Suppose that you have an old car that is a real gas guzzler. It is 10 years old and could be sold to a local dealer for $300 cash. The annual maintenance costs will average $800 per year into the foreseeable future, and the car averages only 9 miles per gallon Gasoline costs $2.90 per gallon, and you drive 13,000 miles per year You now have an opportunity to replace the old car with a better one that costs $8,000. If you buy it, you will pay cash. Because of a 2-year warranty, the maintenance costs are expected to be negligible. This car averages 32 miles per gallon Should you keep the old car or replace it? Utilize a 2-year comparison period and assume that the new car can be sold for $6,000 at the end of year 2. Assume that the salvage value of the old car at the end of year 2 will be SO. Ignore the effect of income taxes and let your MARR be 14% Click the icon to view the interest and annuity table for discrete compounding when MARR - 14% per year. The AW of the old car is (Round to the nearest dollar) The AW of the new car is (Round to the nearest dollar) Choose the correct answer below You should keep the old car You should replace the old car FIA Discrete Compounding; 7-14% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find To Find A Given P Given F Given A Given A Given F F/P PAF PIA AVF 1.1400 0.8772 1.0000 0.8772 1.0000 1.2996 0.7695 2.1400 1.6467 0.4673 1.4815 0.6750 2 3216 0.2907 1.6890 0.5921 4.9211 2.9137 0.2032 1.9254 0.5194 6.6101 3.4331 0.1513 2.1950 0.4556 8.5355 3.8887 0.1172 2.5023 0.3996 10.7305 4.2883 0.0932 2.8526 0.3506 13.2328 4.6389 0.0756 3.2519 0.3075 16.0853 4.9464 0.0622 3.7072 0.2697 19.3373 0.0517 Capital Recovery Factor To Find A Given P A/P 1.1400 0.6073 0.4307 0.3432 0.2913 0.2572 0.2332 0.2156 0.2022 0.1917 3.4396 00W 5.2161
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