When should buy the new hyundai

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Question 1: Replace an existing asset: You have a 2000 Nissan that is expected to run for another three years, but you are considering buying a new Hyundai before the Nissan wears out. You will donate the Nissan to Goodwill when you buy the new car. The annual maintenance cost is $1,500 per year for the Nissan and $200 for the Hyundai. The price of your favorite Hyundai model is $18,000 and it is expected to run for 15 years. Your opportunity cost of capital is 3 percent. Ignore taxes. When should you buy the new Hyundai?

Reference no: EM132519757

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