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You are planning to move to the UAE. The plan is to stay there for 3 years. The fuel price is 3.5 AED/L. Your monthly
You are planning to move to the UAE. The plan is to stay there for 3 years. The fuel price is 3.5 AED/L. Your monthly driving distance is 1500km. You have been introduced to the following transportation options: A. Rent a car for a monthly rent of 1500 AED. Fuel consumption rate 6.7 1/100km. B. Buy a car (price equals 20000 AED). Fuel consumption rate 11 1/100km. C. Buy a car (price 60000 AED. Fuel consumption rate 9 1/100km The annual maintenance cost, regesteration cost, insurance cost, and the salvage value of each option are shown in the following table. A B C 0 2000 2000 registration (AED/a) maintenance (AED/a) 10 3000 1500 Salvage value (AED) 0 8000 44000 Using annualize cost, which option will you choose? This discount rate is 5%. You are planning to move to the UAE. The plan is to stay there for 3 years. The fuel price is 3.5 AED/L. Your monthly driving distance is 1500km. You have been introduced to the following transportation options: A. Rent a car for a monthly rent of 1500 AED. Fuel consumption rate 6.7 1/100km. B. Buy a car (price equals 20000 AED). Fuel consumption rate 11 1/100km. C. Buy a car (price 60000 AED. Fuel consumption rate 9 1/100km The annual maintenance cost, regesteration cost, insurance cost, and the salvage value of each option are shown in the following table. A B C 0 2000 2000 registration (AED/a) maintenance (AED/a) 10 3000 1500 Salvage value (AED) 0 8000 44000 Using annualize cost, which option will you choose? This discount rate is 5%
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