Choose the formula that you will use for the following case: A major repair on the suspension system of a 5-year-old car cost $2000. The cost of periodic maintenance has been $800 every 2 years. If the owner donates the car to charity after 8 years of ownership, what is the quivalent annual cost of the repair and maintenance in the 8-year period of ownership? Use an interest rate of 8% per year, and assume that the owner paid the $800 maintenance cost immediately before donating the car in year 8. AW = -2000 (A/P, 8%, 8) - 800 (A/P, 8%, 2) - 800 (A/P,8%, 4) - 800 (A/P, 8%, 6) - 800 (A/P,8%, 8) PW = -2000 (P/A, 8%, 8) - 800 (P/A, 8%, 2) - 800 (P/A, 8%, 4) - 800 (P/A, 8%, 6) - 800 (P/A, 8%, 8) PW = -2000 (P/F, 8%, 8) - 800 (P/F, 8%, 2) - 800 (P/F, 8%, 4) - 800 (P/F, 8%, 6) - 800 (P/F, 8%, 8) AW = -2000 (A/F, 8%, 8) - 800 (A/F, 8%, 2) - 800 (A/F,8%, 4) - 800 (A/F, 8%, 6) - 800 (A/F,8%, 8)

Choose the formula that you will use for the following case: A major repair on the suspension system of a 5-year-old car cost $2000. The cost of periodic maintenance has been $800 every 2 years. If the owner donates the car to charity after 8 years of ownership, what is the quivalent annual cost of the repair and maintenance in the 8-year period of ownership? Use an interest rate of 8% per year, and assume that the owner paid the $800 maintenance cost immediately before donating the car in year 8. AW = -2000 (A/P, 8%, 8) - 800 (A/P, 8%, 2) - 800 (A/P,8%, 4) - 800 (A/P, 8%, 6) - 800 (A/P,8%, 8) PW = -2000 (P/A, 8%, 8) - 800 (P/A, 8%, 2) - 800 (P/A, 8%, 4) - 800 (P/A, 8%, 6) - 800 (P/A, 8%, 8) PW = -2000 (P/F, 8%, 8) - 800 (P/F, 8%, 2) - 800 (P/F, 8%, 4) - 800 (P/F, 8%, 6) - 800 (P/F, 8%, 8) AW = -2000 (A/F, 8%, 8) - 800 (A/F, 8%, 2) - 800 (A/F,8%, 4) - 800 (A/F, 8%, 6) - 800 (A/F,8%, 8)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Choose the formula that you will use for the following case:
A major repair on the suspension system of a 5-year-old car cost $2000. The cost of
periodic maintenance has been $800 every 2 years. If the owner donates the car to charity
after 8 years of ownership, what is the quivalent annual cost of the repair and
maintenance in the 8-year period of ownership? Use an interest rate of 8% per year, and
assume that the owner paid the $800 maintenance cost immediately before donating the
car in year 8.
AW = -2000 (A/P, 8%, 8) - 800 (A/P, 8%, 2) - 800 (A/P,8%, 4) - 800 (A/P, 8%, 6) - 800 (A/P,8%, 8)
PW = -2000 (P/A, 8%, 8) - 800 (P/A, 8%, 2) - 800 (PIA, 8%, 4) - 800 (P/A, 8%, 6) - 800 (P/A, 8%, 8)
PW = -2000 (P/F, 8%, 8) - 800 (P/F, 8%, 2) - 800 (P/F, 8%, 4) - 800 (P/F, 8%, 6) - 800 (P/F, 8%, 8)
AW = -2000 (A/F, 8%, 8) - 800 (A/F, 8%, 2) - 800 (A/F,8%, 4) - 800 (A/F, 8%, 6) - 800 (A/F,8%, 8)

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