What is the best option, If the MARR is 15% per year, what

What is the best option

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Reference no: EM131810518

A used car can be kept for two more years and then sold for an estimated value of $3000, or it can be sold now for $7500. The average annual maintenance cost over the past 7 years has been $500 per year. However, if the car is kept for two more years, this cost is expected to be $1800 the first year and $2000 the second year. As an alternative, a new car can be purchased for $22,000 and be used for 4 years, after which it will be sold for $8,000. The new car will be under warranty the first 4 years, and no extra maintenance cost will be incurred during those years. If the MARR is 15% per year, what is the best option? Contributed by Hamed Kashani, Saeid Sadri, and Baabak Ashuri, Georgia Institute of Technology

Reference no: EM131810518

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