You Are Trying to Pick the Least Expensive Car for Your

question 77

Multiple Choice

You are trying to pick the least expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $13,000 to purchase and which will have OCF of −$1,200 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $23,000 to purchase and which will have OCF of −$550 annually throughout that vehicle's expected five-year life. Both cars will be worthless at the end of their life. If you intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future, and if your business has a cost of capital of 16 percent, what is the difference in the EAC of the two cars?

• A) $381.36
• B) $428.04
• C) $586.07
• D) $601.51

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Definitions:

Child Maltreatment

Refers to any act by a caregiver that results in harm or a risk of harm to a child, including physical, emotional, or sexual abuse, as well as neglect.

Delinquent Parenting

A style of parenting characterized by a lack of discipline and neglect, which can lead to behavioral issues in children.

Birth-order Effects

Psychological and behavioral differences observed between individuals of different birth positions in a family.

Aggression

Behavior intended to harm or intimidate others, can be physical or verbal.