01:59: You have a 2000 Nissan that is expected to run for another three years, but you are considering buying a new Hyundai before the Nissan wears out. You will donate the Nissan t Goodwill when you buy the new car. The annual maintenance cost is $150 for the Hyundai and the annual maintenance cost of the old Nissan increases as time goes by. It is $1,280 in the first year, $1,400 in the second year, and $1,520 in the third year. The price of y favorite Hyundai model is $17,000, and it is expected to run for 15 years. The net present value of new Hyundai is $18,927.39. Your opportunity cost of capital is 2 percent. Ignore taxes. When should you replace the Nissan with the new Hyundai? (Do not round intermediate calculations. Round final answer to 2 decimal places, eg. 5.275.25.) your

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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01:59:
You have a 2000 Nissan that is expected to run for another three years, but you are
considering buying a new Hyundai before the Nissan wears out. You will donate the Nissan t
Goodwill when you buy the new car. The annual maintenance cost is $150 for the Hyundai
and the annual maintenance cost of the old Nissan increases as time goes by. It is $1,280 in
the first year, $1,400 in the second year, and $1,520 in the third year. The price of y
favorite Hyundai model is $17,000, and it is expected to run for 15 years. The net present
value of new Hyundai is $18,927.39. Your opportunity cost of capital is 2 percent. Ignore
taxes. When should you replace the Nissan with the new Hyundai? (Do not round
intermediate calculations. Round final answer to 2 decimal places, eg. 5.275.25.)
your
Transcribed Image Text:01:59: You have a 2000 Nissan that is expected to run for another three years, but you are considering buying a new Hyundai before the Nissan wears out. You will donate the Nissan t Goodwill when you buy the new car. The annual maintenance cost is $150 for the Hyundai and the annual maintenance cost of the old Nissan increases as time goes by. It is $1,280 in the first year, $1,400 in the second year, and $1,520 in the third year. The price of y favorite Hyundai model is $17,000, and it is expected to run for 15 years. The net present value of new Hyundai is $18,927.39. Your opportunity cost of capital is 2 percent. Ignore taxes. When should you replace the Nissan with the new Hyundai? (Do not round intermediate calculations. Round final answer to 2 decimal places, eg. 5.275.25.) your
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