You bought a used electric car 3 years ago for $30,000. For the past 3 years, it
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Question:
You bought a used electric car 3 years ago for $30,000. For the past 3 years, it had a uniform annual depreciation of $1000/year only since the value remained stable. From the current year, the car will depreciate by $3,000/year and you want to find the best time to sell from today. Your estimated annual operating cost is $1,000 one year from now and will increase by 20% per year as the car becomes old. The annual average cost for electric recharge is $500. Calculate the economic service life of the car from now. Assume an annual effective interest rate of 10%. Note that you want to sell the car within a maximum of 9 years from today when its salvage value will become 0////
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