Your car remaining age is 4 years. Because of its age, your car costs $11,500 annually in maintenance expense.  You could replace it with a newer vehicle costing $10,700 that would be expected to have a life of 6 years.  If your opportunity cost of capital is 9%, by how much must maintenance expense decrease on the new vehicle to justify its purchase?

Answer rating: 100% (QA)

Lets break down the costs for each option Option 1 Keep the Old Car Remaining age of the old car 4 y... View the full answer