You plan to purchase a car for $28,000. Its market value will decrease by 20% per...

You plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS-allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.485 per mile in the first year. You anticipate that it will go up at a rate of 10% each year, with the price of oil rising, influencing gasoline, oils, greases, tires, and so on. You normally drive 15,000 miles per year. What is the optimum replacement interval for the car? Why? Your MARR is 9%. Show all the EUAC calculation steps for at least one “n” and fill out the table below for different n’s up to 10 years to get credit (do NOT just give the final answer and a justification).

Please show cash flow diagram and do not use excel functions.

n	EUAC
1
2
3
4
5
6
7
8
9
10

Expert Solution

Rahul Sunny answered 2 years ago

You plan to purchase a car for $28,000. Its market value will decrease by 20% per...

You plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS-allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.485 per mile in the 1st year. You anticipate that it will go up at a rate of 10% each year, with the price of oil rising, influencing gasoline, oils, greases, tires, and so on. You normally drive 15,000 miles per year. Your...

You plan to purchase a car for $28,000. Its market value will decrease by 20% per...

You plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS-allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.485 per mile in the 1st year. You anticipate that it will go up at a rate of 10% each year, with the price of oil rising, influencing gasoline, oils, greases, tires, and so on. You normally drive 15,000 miles per year. Your...

You purchase a car for 10,000 The car loan is financed with a 5% per year,...

You purchase a car for 10,000 The car loan is financed with a 5% per year, 5 year loan with annyual payments starting at time 1 (1 year from today) through time 5 Each payment reduces the principal by a certain amount until the loan is completely paid off. What is the interest component of the first payment? (I am allowed to use the TI-34 and BAII Plus calculators)

McAfee company will make contributions to a pension plan for 20 years, and then payout $28,000...

McAfee company will make contributions to a pension plan for 20 years, and then payout $28,000 per year ( at the end lf each year) for the next 15 years. assuming money always earns 9% per year, what quarterly contributions must be made (at the end of each quarter) for the next 20 years to meet their obligation

You are a college student and you plan to purchase a new car after you graduate...

You are a college student and you plan to purchase a new car after you graduate and begin your first job. You want to start saving for a down payment now on a new car in the future . You decide to make monthly payment into a saving account, which earns 2.5% annual interest compounded monthly. You will calculate a monthly payment into the saving account for each scenario. A.To save $4,000 for 3 years. B.To save $5,000 for 3...

You are 20 years old and plan to purchase a house when you are 35 .a....

You are 20 years old and plan to purchase a house when you are 35 .a. The current price of the house you want to purchase is $275,000 and the price is expected to increase by 3% per year. How much will the house cost when you are 35? b. When you are 35, the bank will require a cash down-payment of 10% of the house price to obtain a mortgage. How much will you need to save each year...

In the market A the price a company charges per product is $ 20 and its...

In the market A the price a company charges per product is $ 20 and its marginal cost is $ 10. In market B, another company sells a product at $ 30 and its marginal cost is $ 20. i) Who has greater market power company A or company B? ii) If we now know that the elasticity of demand is -2 in the market A and -0.3 in the market B. Who has greater market power? Why?

Suppose you are in the market to purchase a used car. To make an informed decision...

Suppose you are in the market to purchase a used car. To make an informed decision regarding your purchase, you would like to collect as much information as possible. Among the information you might consider are the typical price of the car, the typical number of miles the car should have, and its crash test results, insurance costs, and expected repair costs. Make a list of at least three cars that you would consider purchasing. To be fair, the cars...

You are planning to purchase a house that costs $480,000. You plan to put 20% down...

You are planning to purchase a house that costs $480,000. You plan to put 20% down and borrow the remainder. Based on your credit score, you believe that you will pay 3.99% on a 30-year mortgage. Use function “PMT” to calculate your mortgage payment. Use function “PV” to calculate the loan amount given a payment of $1700 per month. What is the most that you can borrow? Use function “RATE” to calculate the interest rate given a payment of $1700...

you plan to purchase the new Tesla Model 3 in 5 years. The car will cost...

you plan to purchase the new Tesla Model 3 in 5 years. The car will cost $35,000. You will be able to afford payments of $550 per month and plan to take out a 3 year loan at 4.25% to finance the purchase. What down payment would you have to provide to have your desired monthly payments. How much would you need to save each month in an account earning 3.5% interest to afford this down payment in 5 years

Question

You plan to purchase a car for $28,000. Its market value will decrease by 20% per...

Solutions

Expert Solution

Related Solutions

You plan to purchase a car for $28,000. Its market value will decrease by 20% per...

You plan to purchase a car for $28,000. Its market value will decrease by 20% per...

You purchase a car for 10,000 The car loan is financed with a 5% per year,...

McAfee company will make contributions to a pension plan for 20 years, and then payout $28,000...

You are a college student and you plan to purchase a new car after you graduate...

You are 20 years old and plan to purchase a house when you are 35 .a....

In the market A the price a company charges per product is $ 20 and its...

Suppose you are in the market to purchase a used car. To make an informed decision...

You are planning to purchase a house that costs $480,000. You plan to put 20% down...

you plan to purchase the new Tesla Model 3 in 5 years. The car will cost...