A land surveyor just starting in private practice needs a van to carry crew and equipment. He can lease a used van for $8000 per year, paid at the beginning of each year, in which case maintenance is provided. Alternatively, he can buy a used van for $16,000 and pay for maintenance himself. He expects to keep the van for 3 years, at which time he would sell it for an anticipated $3500. Given a MARR of 6%, what is the most the surveyor should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it?
A land surveyor just starting in private practice needs a van to carry crew and equipment. He can lease a used van for $8000 per year, paid at the beginning of each year, in which case maintenance is provided. Alternatively, he can buy a used van for $16,000 and pay for maintenance himself. He expects to keep the van for 3 years, at which time he would sell it for an anticipated $3500. Given a MARR of 6%, what is the most the surveyor should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it?
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
Section: Chapter Questions
Problem 1PS
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A land surveyor just starting in private practice needs a van to carry crew and equipment. He can lease a used van for $8000 per year, paid at the beginning of each year, in which case maintenance is provided. Alternatively, he can buy a used van for $16,000 and pay for maintenance himself. He expects to keep the van for 3 years, at which time he would sell it for an anticipated $3500. Given a MARR of 6%, what is the most the surveyor should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it?
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