Question
In: Finance
You are trying to decide whether to keep your current car or buy a new car....
You are trying to decide whether to keep your current car or buy a new car. If you keep your current car you will pay $350 per month (starting next month) on average for maintenance, gas, property tax and insurance. You will make these payments for 10 years. Alternatively, you can buy a new car and pay $28,000 today and $300 per month (starting next month) on average for maintenance, gas, property tax and insurance. You will make these payments for for 10 years. If your investments earn 3% APR (compounded monthly), which alternative is cheaper in present value terms and by how much?
get new car, saves $24,863
keep existing car saves $22,822
keep existing car saves $22,157
keep existing car saves $23,963
Solutions
jeff jeffy answered 2 years agoRelated Solutions
You are trying to decide whether to keep your current car or buy a new car....
You are trying to decide whether to keep your current car or buy
a new car. If you keep your current car you will pay $350 per month
(starting next month) on average for maintenance, gas, property tax
and insurance. You will make these payments for 10 years.
Alternatively, you can buy a new car and pay $28,000 today and $300
per month (starting next month) on average for maintenance, gas,
property tax and insurance. You will make these payments...
You are trying to decide whether to keep your current car or buy a new car....
You are trying to decide whether to keep your current car or buy
a new car. If you keep your current car you will pay $350 per month
(starting next month) on average for maintenance, gas, property tax
and insurance. You will make these payments for 10 years.
Alternatively, you can buy a new car and pay $28,000 today and $300
per month (starting next month) on average for maintenance, gas,
property tax and insurance. You will make these payments...
You are trying to decide whether to keep your current car or buy a new car....
You are trying to decide whether to keep your current car or buy
a new car. If you keep your current car you will pay $400 per month
(starting next month) on average for maintenance, gas, property tax
and insurance. You will make these payments for 10 years.
Alternatively, you can buy a new car and pay $28,000 today and $350
per month (starting next month) on average for maintenance, gas,
property tax and insurance. You will make these payments...
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require more laborers the annual return ıs only $250 of net cash
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the mules have a working life of 8 years and the tractor has
aworking life of...
the management of flasher is trying to decide whether to buy a new team of mules...
the management of flasher is trying to decide whether to buy a
new team of mules at a cost of $1.000 or a new tractor at a cost of
$10.000 they will perform the same job but because the mules
require more laborers the annual return ıs only $250 of net cash
ınflows the tractor will return $2.000 of net cash ınflows per year
the mules have a working life of 8 years and the tractor has
aworking life of...
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The Wildcat Oil Company is trying to decide whether to lease or buy a new computer-assisted...
The Wildcat Oil Company is trying to decide whether to lease or
buy a new computer-assisted drilling system for its oil exploration
business. Management has decided that it must use the system to
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