Deluxe Motors owns a Bobcat skid steer, today it is currently worth $28,300. Looking to the...

 

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Deluxe Motors owns a Bobcat skid steer, today it is currently worth $28,300. Looking to the future they believe it will go down in value by 10% every year. Their operating and maintenance costs for the skid steer will be $1,716 this year and they will increase by $500 every year. Use an interest rate of 9 %/yr. What is their marginal cost for year 3? Deluxe Motors owns a Bobcat skid steer, today it is currently worth $28,300. Looking to the future they believe it will go down in value by 10% every year. Their operating and maintenance costs for the skid steer will be $1,716 this year and they will increase by $500 every year. Use an interest rate of 9 %/yr. What is their marginal cost for year 3?

Answer rating: 100% (QA)

To calculate the marginal cost for year 3 we need to consider the decrease in the value of the skid steer the operating and maintenance costs and the ... View the full answer