Because of Its Age, Your Car Costs $4,000 Annually in Maintenance

question 34

Multiple Choice

Because of its age, your car costs $4,000 annually in maintenance expense.You could replace it with a newer vehicle costing $8,000.Both vehicles would be expected to last four more years.If your opportunity cost is 8 percent, by how much must maintenance expense decrease on the newer vehicle to justify its purchase?

• A)$1,250
• B)$1,585
• C)$2,000
• D)$2,415

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Definitions:

Transformational Logic

A theory or process of changing one structure into another, often used in linguistic and mathematical contexts to describe systematic changes.

Pulse Pressure

The difference between the systolic and diastolic blood pressure readings, providing information about the health and elasticity of arteries.

Blood Pressure

The force exerted by circulating blood upon the walls of blood vessels, a critical indicator of cardiovascular health.

Pulse Rate

The number of heartbeats per minute, indicating the heart rate; it is often measured at resting conditions.