You Buy a New Car for $20 000

question 43

Multiple Choice

You buy a new car for $20 000. Its salvage value declines by declining-balance depreciation of 10% per year, while its maintenance costs are $500 in the first year and go up by $400 a year. If your MARR is 5%, what is the EAC to you of keeping it until it reaches the end of its economic life?

• A)$4 358
• B)$4 335
• C)$4 327
• D)$4 333
• E)$4 352