Question: I have seen this question asked, verbatim, in another solution. When I look at their solution given and someone acknowledging it as being correct, the
I have seen this question asked, verbatim, in another solution. When I look at their solution given and someone acknowledging it as being correct, the system is telling me it's wrong. Any help?
You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $15,000 to purchase and which will have OCF of $1,400 annually throughout the vehicles expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $21,000 to purchase and which will have OCF of $750 annually throughout that vehicles expected 4-year life. Both cars will be worthless at the end of their life. You intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future. If the business has a cost of capital of 13 percent, calculate the EAC. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)
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