an believes the batteries can be expected to last only for the iarantee period. She does not want to invest extra money in a attery unless she can expect a 40% rate of return. If she plans to eep her present car another 2 years, which battery should she buy? wo investment opportunities are as follows: A B irst cost $200 $100 niform annual benefit 25 20 nd-of-useful-life salvage value 45 seful life, in years 15 10 t the end of 10 years, Alt. B is not replaced. Thus, the comparison is 5 years of A versus 10 years of B. If the MARR is 8%, which ternative should be selected?
an believes the batteries can be expected to last only for the iarantee period. She does not want to invest extra money in a attery unless she can expect a 40% rate of return. If she plans to eep her present car another 2 years, which battery should she buy? wo investment opportunities are as follows: A B irst cost $200 $100 niform annual benefit 25 20 nd-of-useful-life salvage value 45 seful life, in years 15 10 t the end of 10 years, Alt. B is not replaced. Thus, the comparison is 5 years of A versus 10 years of B. If the MARR is 8%, which ternative should be selected?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Jean believes the batteries can be expected to last only for the
guarantee period. She does not want to invest extra money in a
battery unless she can expect a 40% rate of return. If she plans to
keep her present car another 2 years, which battery should she buy?
Two investment opportunities are as follows:
A B
First cost
$200 $100
Uniform annual benefit
25
20
End-of-useful-life salvage value 45
Useful life, in years
15
10
At the end of 10 years, Alt. B is not replaced. Thus, the comparison is
15 years of A versus 10 years of B. If the MARR is 8%, which
alternative should be selected?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe80d4822-c3c0-457c-9869-fdb813cae850%2F258c3c3c-20d2-4288-a1e1-4a24a1408e51%2Fyigk2ma_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Jean believes the batteries can be expected to last only for the
guarantee period. She does not want to invest extra money in a
battery unless she can expect a 40% rate of return. If she plans to
keep her present car another 2 years, which battery should she buy?
Two investment opportunities are as follows:
A B
First cost
$200 $100
Uniform annual benefit
25
20
End-of-useful-life salvage value 45
Useful life, in years
15
10
At the end of 10 years, Alt. B is not replaced. Thus, the comparison is
15 years of A versus 10 years of B. If the MARR is 8%, which
alternative should be selected?
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