Calculate the Annual worth.

Question

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Answer 1

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Students have asked these similar questions

Andrew’s utility depends on consuming L, hours of leisure and Y a composite good. Andrew can work as many hours as he wants to at the wage rate of w, and the price of Y is $1. Andrew’s indifference curves exhibit diminishing MRS. When Andrew’s wage rate decreases, he spends less time working. Answer the following questions using a indifference curve-budget line diagram. Explain your answers carefully. a. Does the substitution effect cause him to work less hours? (If the direction of the effect is ambiguous, say so, and show why on your diagram) b. Does the income effect cause him to work less hours? (If the direction of the effect is ambiguous, say so, and show why on your diagram)

Not use ai please

Answer 2

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 3

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 4

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 6

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 7

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Answer 8

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345