Question
Because of its age, your car costs $4,000 annually in maintenance expense. You could replace it...
Because of its age, your car costs $4,000 annually in
maintenance expense. You could
replace it with a newer vehicle costing $8,000. Both vehicles would
be expected to last four more
years. If your opportunity cost is 8 percent, by how much must
maintenance expense decrease on
the newer vehicle to justify its purchase?
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