Why should purchase the extended warranty

Assignment Help Econometrics

Reference no: EM13205161

Automobile companies often provide a 3-year warranty on new vehicles. Consumers must pay for extended warranties beyond the manufacturer's warranty period. Suppose that a 5-year extended warranty is offered for your new vehicle at a price of $1,314. This would cover years 4 and 5, after the manufacturer's warranty has expired. Suppose that the expected repair costs for years 4 and 5 are $800 per year. If your discount rate is 6% per year, should you purchase the extended warranty?

Reference no: EM13205161

Questions Cloud

What is the realized return on your investment : You receive the coupon payments for three years and the bond defaults. After liquidating the firm. The bondholders receive a distribution of $150 per bond at the end of 3.5 years. What is the realized return on your investment?

What is the marginal cost of the last unit : The daily wage (per worker) is $70, and the price of the firm's output is $32. The cost of other variable inputs is $2,000 per day. You are told that the firm's fixed cost is "high enough" so that the firm's total costs exceed its total revenue.

Calculate the amount of profit : Explain how this leader in your firmcan speculate on the belief that the euro will be $1.41 in 12 months and calculate the amount of profit that can be earned and the percentage return achieved.

State solution beginning with solid ammonium phosphate : prepare 250.00 mL of 0.150 M ammonium ion solution beginning with solid ammonium phosphate, (NH4)3 PO4.

Why should purchase the extended warranty : Automobile companies often provide a 3-year warranty on new vehicles. Consumers must pay for extended warranties beyond the manufacturer's warranty period. Suppose that a 5-year extended warranty is offered for your new vehicle at a price of $1,31..

What is the least amount of material : What is the least amount of material that can be used to make a soup can with a circular base and closed top with capacity 6 cubic inches?

State the concentration of the final solution : portion of the stock solution and dilute it to a total volume of 0.550L what will be the concentration of the final solution?

How much did you invest at each rate : Suppose you invested $10,000, part 6% annual interest and the rest at 9% annual interest. If you received $684 in interest after one year, how much did you invest at each rate?

How to utilize stay-even analysis : A company currently sells 1,000 units a year at $25 per unit. The marginal cost of each unit is $12. The company is considering lowering the price by 4%. The company believes that this price discount will increase its economic profits.

User Account

All Pages