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What will be the price of the new board

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You have a surfboard that you are not using fully and your sister wants to share it for $60 per year. You judge that if you share the board with your sister then the board will only last for 3 years, instead of 4 years if you keep it to yourself, and then you will need to buy a new board. You are not sure how much the new board will cost, but you know that it will last for 6 years. Assume zero tax rate and discount rate of 8%. What will be the price of the new board which will make you indifferent (i.e. NPV = 0) to sharing the board with your sister?

Reference no: EM132485062

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