A construction manager just starting in private practice needs a van to carry crew and equipment. She can lease a used van for $3,867 per year, paid at the beginning of each year, in which case maintenance is provied. Alternatively, she can buy a used van for $6,427 and pay for maintenance herself. She expects to keep the van for three years at which time she could sell it for $1,251. What is the most she should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it, if her MARR is 20%?

A construction manager just starting in private practice needs a van to carry crew and equipment. She can lease a used van for $3,867 per year, paid at the beginning of each year, in which case maintenance is provied. Alternatively, she can buy a used van for $6,427 and pay for maintenance herself. She expects to keep the van for three years at which time she could sell it for $1,251. What is the most she should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it, if her MARR is 20%?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter4: Going Into Debt

Section: Chapter Questions

Problem 28AA

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