Rondo is in the market for a new car. You have narrowed your search to 2 models.
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Question:
Rondo is in the market for a new car. You have narrowed your search to 2 models. Model A costs $39,000 and Model B costs $34,000. With both cars, he plans to pay cash and own them for 4 years before trading them in for a new car. Their research indicates that the market value of the Model A after 4 years is 59% of the initial purchase price, while the market value of the Model B is 41%. The interest rate is 4%. For simplicity, assume that the operating and maintenance costs of the models are identical. Which model is the better decision and how much "cheaper" is it than the alternative?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: