Question
You can continue driving your old Toyota Corolla at an annual maintenance cost of $8000 per year for three the next (3) years. Alternatively, you
You can continue driving your old Toyota Corolla at an annual maintenance cost of $8000 per year for three the next (3) years. Alternatively, you can purchase a new Ford Escape for $25,000 plus $1000 annual maintenance for the next 5 years. If the cost of capital is 12%, you should: Select one:
a. Buy the Ford and save $684.41 in equivalent annual costs
b. Keep the Toyota and save $64.81 in equivalent annual costs
c. Buy the Ford and save $64.81 in equivalent annual costs
d. Buy the Ford and save $84.41 in equivalent annual costs e. Keep the Toyota and save $684.41 in equivalent annual costs
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