The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always
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The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:
Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $ each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:
tableAnnual cost of servicing, taxes, and licensing,$
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