Ggg(b) Should I sell my gas-guzzler? My 2001 Toyota Corolla is quite functional, but it only averages 20 miles per gallon (mpg). I have found a somewhat newer vehicle (roughly the same functionality) that averages 26 mpg. I can sell my current car for BDT1,400,000 and purchase the newer vehicle for BDT2,000,000. Assume a cost of gasoline BDT400 per gallon. How many miles per year must I drive if I want to recover my investment in three years? Assume an interest rate of 10%, 50% of current price as salvage value for either vehicle after five years, and identical maintenance cost. Considering that I drive about 10,000 miles per year. If gas prices drop by 10%, should I still sell my gas-guzzling minivan?
Ggg(b) Should I sell my gas-guzzler? My 2001 Toyota Corolla is quite functional, but it only averages 20 miles per gallon (mpg). I have found a somewhat newer vehicle (roughly the same functionality) that averages 26 mpg. I can sell my current car for BDT1,400,000 and purchase the newer vehicle for BDT2,000,000. Assume a cost of gasoline BDT400 per gallon. How many miles per year must I drive if I want to recover my investment in three years? Assume an interest rate of 10%, 50% of current price as salvage value for either vehicle after five years, and identical maintenance cost. Considering that I drive about 10,000 miles per year. If gas prices drop by 10%, should I still sell my gas-guzzling minivan?
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