Eric Hashimoto has a 2010 vehicle that he plans to update with a fancy navigation system that will give him access to road maps. He can buy one for $500. The service provider charges $20 per month. Eric is a traveling salesman and he figures that the device will save him time and money. He calculates that he will save about $35 per month because he will use less gas. Eric wants to calculate how many months it would take him to break even. His plan is to keep his current car for three more years. a)Calculate the breakeven point for the device in months. b)Should he buy the device?
Eric Hashimoto has a 2010 vehicle that he plans to update with a fancy navigation system that will give him access to road maps. He can buy one for $500. The service provider charges $20 per month. Eric is a traveling salesman and he figures that the device will save him time and money. He calculates that he will save about $35 per month because he will use less gas. Eric wants to calculate how many months it would take him to break even. His plan is to keep his current car for three more years. a)Calculate the breakeven point for the device in months. b)Should he buy the device?
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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Eric Hashimoto has a 2010 vehicle that he plans to update with a fancy navigation system that will give him access to road maps. He can buy one for $500. The service provider charges $20 per month. Eric is a traveling salesman and he figures that the device will save him time and money. He calculates that he will save about $35 per month because he will use less gas.
Eric wants to calculate how many months it would take him to break even. His plan is to keep his current car for three more years.
- a)Calculate the breakeven point for the device in months.
- b)Should he buy the device?
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