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in Menu signments Help Marginal costs Personal Finance Problem Jimmy Johnson is interested in buying a new Jeep SUV. There are two options available a
in Menu signments Help Marginal costs Personal Finance Problem Jimmy Johnson is interested in buying a new Jeep SUV. There are two options available a V-6 model and a V-8 model. Whichever model he chooses he plans to drive it for a period of 5 years and then sellit Assume that the trade-in value of the two vehicales at the end of the 5-year ownership period will be identical The two models have definite differences, and Jimmy needs to make a financial comparison. The manufacturer's suggested retail price (MSRP) of the V-6 and V-8 are $30.610 and 544 140 respectively Jimmy believes the difference of $13,530 to be the marginal cost difference between the two vehicles However, many more data are available, and you suggest to Jimmy that his analysis may be too simple and will lead him to a poor financial decision Assume that the prevalling discount rate for both vehicles is 5 8% annually Other pertinent information on this purchase is shown in the following table: Homework ake a Quiz/Test a. Calculate the total "true" cost for each vehicle over the 5-year ownership period, b. Calculate the total fuel cost for each vehicle over the 5-year ownership period c. What is the marginal fuel cost from purchasing the larger V-8 SUV? d. What is the marginal cost of purchasing the larger and more expensive V-8 SUV? e. What is the total marginal cost associated with purchasing the V-8 SUV? How does this figure compare with the $13,530 that Jimmy calculated? a. The true cost of the V-6 modelis S. Round to the nearest dollar Enter your answer in the answer box and then click 7 para remaining i Data Table x (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) MSRP Engine (liters) Cylinders Depreciation over 5 years Finance charges over entire 5-year period Insurance over 5 years Taxes and fees over 5 years Maintenance/repairs over 5 years Average miles per gallon Ownership period in years Miles driven per year over 5 years Cost per gallon of gas over 5-year ownership V-6 $30.610 3.7 6 $17.538 S5.526 $7.633 $2,204 $5.500 19 5 15.000 $3,34 V-8 $44,140 57 8 $25.427 $7.969 $8,048 $2.925 $5,500 14 5 15.000 53.34 Print Done in Menu signments Help Marginal costs Personal Finance Problem Jimmy Johnson is interested in buying a new Jeep SUV. There are two options available a V-6 model and a V-8 model. Whichever model he chooses he plans to drive it for a period of 5 years and then sellit Assume that the trade-in value of the two vehicales at the end of the 5-year ownership period will be identical The two models have definite differences, and Jimmy needs to make a financial comparison. The manufacturer's suggested retail price (MSRP) of the V-6 and V-8 are $30.610 and 544 140 respectively Jimmy believes the difference of $13,530 to be the marginal cost difference between the two vehicles However, many more data are available, and you suggest to Jimmy that his analysis may be too simple and will lead him to a poor financial decision Assume that the prevalling discount rate for both vehicles is 5 8% annually Other pertinent information on this purchase is shown in the following table: Homework ake a Quiz/Test a. Calculate the total "true" cost for each vehicle over the 5-year ownership period, b. Calculate the total fuel cost for each vehicle over the 5-year ownership period c. What is the marginal fuel cost from purchasing the larger V-8 SUV? d. What is the marginal cost of purchasing the larger and more expensive V-8 SUV? e. What is the total marginal cost associated with purchasing the V-8 SUV? How does this figure compare with the $13,530 that Jimmy calculated? a. The true cost of the V-6 modelis S. Round to the nearest dollar Enter your answer in the answer box and then click 7 para remaining i Data Table x (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) MSRP Engine (liters) Cylinders Depreciation over 5 years Finance charges over entire 5-year period Insurance over 5 years Taxes and fees over 5 years Maintenance/repairs over 5 years Average miles per gallon Ownership period in years Miles driven per year over 5 years Cost per gallon of gas over 5-year ownership V-6 $30.610 3.7 6 $17.538 S5.526 $7.633 $2,204 $5.500 19 5 15.000 $3,34 V-8 $44,140 57 8 $25.427 $7.969 $8,048 $2.925 $5,500 14 5 15.000 53.34 Print Done
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