Question
In: Finance
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $46,000....
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $46,000. The object is to save on horse transporter rentals. Marsha had been renting a transporter every other week for $211 per week plus $1.55 per mile. Most of the trips are 90 miles in total. Marsha usually gives the driver a $45 tip. With the new transporter she will only have to pay for diesel fuel and maintenance, at about $.56 per mile. Insurance costs for Marsha’s transporter are $1,750 per year. The transporter will probably be worth $26,000 (in real terms) after eight years, when Marsha’s horse Nike will be ready to retire. Assume a nominal discount rate of 7% and a forecasted inflation rate of 2%. Marsha’s transporter is a personal outlay, not a business or financial investment, so taxes can be ignored. Hint: All numbers given in the questions are in real terms. Assume CF at end of year, for simplicity. Calculate the NPV of the investment.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
. Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost...
. Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $35,000. The object is to save on
horse transporter rentals. Marsh had been renting a transporter
every other week for $200 per day plus $1.00 per mile. Most of the
trips are 80 or 100 miles in total. Marsha usually gives her
driver, Joe Laminitis, a $40 tip. With the new transporter she will
only have to pay for diesel fuel and maintenance, at...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $50,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $50,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $215 per
day plus $1.75 per mile. Most of the trips are 80 or 100 miles in
total. Marsha usually gives Joe Laminitis, the driver, a $40 tip.
With the new transporter she will only have to pay for diesel fuel
and maintenance, at about...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $35,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $35,000. The object is to save on
horse transporter rentals. Marsh had been renting a transporter
every other week for $200 per day plus $1.00 per mile. Most of the
trips are 80 or 100 miles in total. Marsha usually gives her
driver, Joe Laminitis, a $40 tip. With the new transporter she will
only have to pay for diesel fuel and maintenance, at about...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $36,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $36,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $201 per
day plus $1.05 per mile. Most of the trips are 80 or 100 miles in
total. Marsha usually gives Joe Laminitis, the driver, a $45 tip.
With the new transporter she will only have to pay for diesel fuel
and maintenance, at about...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $35,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $35,000. The object is to save on
horse transporter rentals. Marsh had been renting a transporter
every other week for $200 per day plus $1.00 per mile. Most of the
trips are 80 or 100 miles in total. Marsha usually gives her
driver, Joe Laminitis, a $40 tip. With the new transporter she will
only have to pay for diesel fuel and maintenance, at about...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $36,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $36,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $201
per week plus $1.05 per mile. Most of the trips are 90 miles in
total. Marsha usually gives the driver a $45 tip. With the new
transporter she will only have to pay for diesel fuel and
maintenance, at about $.46 per mile. Insurance...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $50,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $50,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $215
per week plus $1.75 per mile. Most of the trips are 90 miles in
total. Marsha usually gives the driver a $40 tip. With the new
transporter she will only have to pay for diesel fuel and
maintenance, at about $.60 per mile. Insurance...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $41,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $41,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $206
per week plus $1.30 per mile. Most of the trips are 90 miles in
total. Marsha usually gives the driver a $45 tip. With the new
transporter she will only have to pay for diesel fuel and
maintenance, at about $.51 per mile. Insurance...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $47,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $47,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $212
per week plus $1.60 per mile. Most of the trips are 90 miles in
total. Marsha usually gives the driver a $50 tip. With the new
transporter she will only have to pay for diesel fuel and
maintenance, at about $.57 per mile. Insurance...
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $43,000....
Marsha Jones has bought a used Mercedes horse transporter for
her Connecticut estate. It cost $43,000. The object is to save on
horse transporter rentals.
Marsha had been renting a transporter every other week for $208 per
day plus $1.40 per mile. Most of the trips are 80 or 100 miles in
total. Marsha usually gives Joe Laminitis, the driver, a $35 tip.
With the new transporter she will only have to pay for diesel fuel
and maintenance, at about...
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