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:

Entrepreneur

An individual who creates, organizes, and operates a business venture, taking on greater than normal financial risks in order to do so.

Business Plan

A formal document detailing a business's objectives, strategies, target market, and financial projections.

Limited Liability Corporation

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Sole Proprietorship

A business structure where a single individual owns and operates the entire business, bearing all financial risks and responsibilities.