Gerry likes driving small cars and buys nearly identical ones whenever the old one needs replacing. Typically, he trades in his old car for a new one costing about $15,000. A new car warranty covers all repair costs above standard maintenance (standard maintenance costs are constant over the life of the car) for the first two years. After that, his records show an average repair expense (over standard maintenance) of $2400 in the third year (at the end of the year), increasing by 50 percent per year thereafter. If a 30 percent declining-balance depreciation rate is used to estimate salvage values and interest is 9 percent, how often should Gerry get a new car? Click the icon to view the table of compound interest factors for discrete compounding periods when i = 9%.

Gerry likes driving small cars and buys nearly identical ones whenever the old one needs replacing. Typically, he trades in his old car for a new one costing about $15,000. A new car warranty covers all repair costs above standard maintenance (standard maintenance costs are constant over the life of the car) for the first two years. After that, his records show an average repair expense (over standard maintenance) of $2400 in the third year (at the end of the year), increasing by 50 percent per year thereafter. If a 30 percent declining-balance depreciation rate is used to estimate salvage values and interest is 9 percent, how often should Gerry get a new car? Click the icon to view the table of compound interest factors for discrete compounding periods when i = 9%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What companies have failed to adequately respond and adapt to the COVID-19 economy?
IceLess is an anti-icing solution sold in gallon plastic jugs. It is poured into the windshield washer bottle of your car. Wash your windshield and the solution prevents the glass from icing over for about four hours. Production incurs the following fixed and variable costs. It is priced initially at $5.50 per gallon. 1. Fixed costs (per year) Rent Utilities Managerial salaries Flammability permit Other fixed expense Total fixed $18000 13200 20000 12000 2400 $65600 Variable Costs per gallon Glycol FreezeFree 312 Mfg labor Packaging Inert ingredients Advertising Total $1.50 .50 .20 .20 .60 .30 $3.30 What is the annual breakeven production quantity (use above data, show work)? 2. What revenue would the sale of the breakeven quantity for $5.50 per gallon generate? 3. The production department says 29000 gallons is its maximum production capability. Management insists on earning $94400 above fixed costs. All costs are as given initially. What price must be charged per gallon if only 29000…
(d) I'd like to know how to cpmpute producer surplus. Thanks.
If the MPC is .75, then the multipier is 4. True or false?
What can you say about negative and positive gross margin in sensitivity analysis
How many barrels can the first period consume before any User Cost occurs?
tc(q)=4800+5q** find the ATC ATC=TC/q
List two things you need to consider to ensure your premises meet GMP design standards. Please explain in detail and clearly. Thank you!
Bernardo Beefmaster has 50 cull cows that average 1100 Ibs and he purchased them for $60/cwt. He fed the cows for 55 days and sold them at 1260 Ibs for $65/cwt. The cows averaged about 30 lbs of feed per day, and cost $7/cwt. Calculate the average daily gain, feed efficiency (feed:gain), feed only cost of gain, breakeven per pound and total, and the total margin. WHAT IS THE BREAKEVEN VALUE PER POUND?
(a) What is the profit-maximizing level of output and how much daily profit will the producer below earn if the price of pizza is $ 2.50 per slice? MC Salice ATC (AVC 2.50 1.40 slices/day 570
Problem 4/ A firm produced two types of television x of type A and y of type B per year (in thousands). If the revenue and cost equations for the year are (in million dollars) R(x, y) = 3x+6y C(x, y) = x2 + y2-3x-2y-8 Determine how many of each type of television should be produced per year to maximize profit? What is the maximum profit?