Marc Bought a New Car Last Year for $10,000

question 2

Multiple Choice

Marc bought a new car last year for $10,000.He can now sell the car for $8,500.To buy this year's model he would have to pay $11,000.Marc also had to take out a $9,000 loan to buy the car,which had to be paid back in yearly installments of $3,300 per year over three years.What is the implicit rental rate of the first year's use of the car?

• A)$2,800
• B)$1,300
• C)$1,800
• D)$13,300
• E)$4,800

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Definitions:

Estimated Selling Costs

Expenses projected to be incurred in the process of selling an asset, which may include legal fees, marketing, and commissions that reduce the total gains from the sale.

Expected Replacement Cost

The anticipated cost to replace an asset at the end of its useful life, considering current prices and adjustments for inflation.

Household Cleaners

Chemical products used in homes for cleaning and disinfecting surfaces, appliances, and fabric.

Cost/Unit

The total cost associated with creating or acquiring a product divided by the number of units, used to measure production or acquisition efficiency.