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 MARR is 9%.

What is the optimum replacement interval? Show the EUAC value you used to reach your decision.

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 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...

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

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

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

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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...

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