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 for the car?

Show the EUAC value used to reach your decision: $

Expert Solution

jeff jeffy 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,...

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

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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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