You are considering whether to purchase a new car to replace your present car. Being strictly...
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You are considering whether to purchase a new car to replace your present car. Being strictly rational in an economic sense, which of the following costs would you include in making your decision? Indicate whether its Relevant or Not Relevant together with a brief explanation of your choice. Two (2) points each. 1. Cost of the present car 2. Trade in value of your present car 3. Maintenance costs on the present car 4. Fuel consumption on the present car 5. Fuel consumption on the new car 6. Cost of parking permits, garage rental, and similar "storage costs 7. Liability insurance on the present car 8. Liability insurance on the new car 9. Property and collision insurance on the present car 10. Changes in the relative frequency of your friends saying "Let's use your car since it is newer" and the related costs of using the new car. You are considering whether to purchase a new car to replace your present car. Being strictly rational in an economic sense, which of the following costs would you include in making your decision? Indicate whether its Relevant or Not Relevant together with a brief explanation of your choice. Two (2) points each. 1. Cost of the present car 2. Trade in value of your present car 3. Maintenance costs on the present car 4. Fuel consumption on the present car 5. Fuel consumption on the new car 6. Cost of parking permits, garage rental, and similar "storage costs 7. Liability insurance on the present car 8. Liability insurance on the new car 9. Property and collision insurance on the present car 10. Changes in the relative frequency of your friends saying "Let's use your car since it is newer" and the related costs of using the new car.
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1 Relevant Getting to know the price of the old car is important as it helps in getting to know as t... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
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