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For Ruth, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Ruth is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Buy New Buy Used Lease Midnight-Blue SUV Monthly payment $550 $350 $320 plus $2 per mile if over 10,000 miles per year Time frame 6 years 4 years 2 years Warranty Excellent for 100,000 miles Excellent for next 40,000 miles Excellent for length of lease only Full coverage insurance $215 per month $160 per month Operating cost $0.20 per mile $0.20 per mile Expected mileage per 13,800 13,800 $195 per month $0.20 per mile 13,800 year Safety features Maximum Moderate Maximum (a) Identify the relevant costs associated with each of Ruth's three options. (Round answers to 2 decimal places, e.g. 15.25.) Buy New Buy Used Lease Midnight Blue SUV Total average monthly cost +A +A $

For Ruth, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Ruth is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Buy New Buy Used Lease Midnight-Blue SUV Monthly payment $550 $350 $320 plus $2 per mile if over 10,000 miles per year Time frame 6 years 4 years 2 years Warranty Excellent for 100,000 miles Excellent for next 40,000 miles Excellent for length of lease only Full coverage insurance $215 per month $160 per month Operating cost $0.20 per mile $0.20 per mile Expected mileage per 13,800 13,800 $195 per month $0.20 per mile 13,800 year Safety features Maximum Moderate Maximum (a) Identify the relevant costs associated with each of Ruth's three options. (Round answers to 2 decimal places, e.g. 15.25.) Buy New Buy Used Lease Midnight Blue SUV Total average monthly cost +A +A $

CONCEPTS IN FED.TAX.,2020-W/ACCESS
CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 41P
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For Ruth, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Ruth is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Buy New Buy Used Lease Midnight-Blue SUV Monthly payment $550 $350 $320 plus $2 per mile if over 10,000 miles per year Time frame 6 years 4 years 2 years Warranty Excellent for 100,000 miles Excellent for next 40,000 miles Excellent for length of lease only Full coverage insurance $215 per month $160 per month Operating cost $0.20 per mile $0.20 per mile Expected mileage per 13,800 13,800 $195 per month $0.20 per mile 13,800 year Safety features Maximum Moderate Maximum (a) Identify the relevant costs associated with each of Ruth's three options. (Round answers to 2 decimal places, e.g. 15.25.) Buy New Buy Used Lease Midnight Blue SUV Total average monthly cost +A +A $
Transcribed Image Text:For Ruth, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Ruth is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Buy New Buy Used Lease Midnight-Blue SUV Monthly payment $550 $350 $320 plus $2 per mile if over 10,000 miles per year Time frame 6 years 4 years 2 years Warranty Excellent for 100,000 miles Excellent for next 40,000 miles Excellent for length of lease only Full coverage insurance $215 per month $160 per month Operating cost $0.20 per mile $0.20 per mile Expected mileage per 13,800 13,800 $195 per month $0.20 per mile 13,800 year Safety features Maximum Moderate Maximum (a) Identify the relevant costs associated with each of Ruth's three options. (Round answers to 2 decimal places, e.g. 15.25.) Buy New Buy Used Lease Midnight Blue SUV Total average monthly cost +A +A $
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