Solution-Should the agency sell Mustangs and change the

Should the agency sell Mustangs and change the model

Reference no: EM132999921

Question - A sports car dealership owns several Mustang cars that are not selling as expected. The cars were purchased 3 years ago, each for $ 800,000. Currently, the agency plans to keep the cars for 3 more years. The FMV for a 3-year-old car is $ 890,000 and for a 5-year-old non-car is $ 700,000. Annual costs for fuel, maintenance, taxes, etc. they are $ 120,000. The replacement option is to change them for the new model. The annual cost of change is $ 240,000 with annual operating costs of $ 900,000. Should the agency sell Mustangs and change the model if the MARR is 15%?

Reference no: EM132999921

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Should the agency sell Mustangs and change the model

Reference no: EM132999921

Reference no: EM132999921

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