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

question 77

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 4 more years. If your opportunity cost is 8%, by how much must maintenance expense decrease on the newer vehicle to justify its purchase?

• A) $1,625.40
• B) $1,584.63
• C) $1,469.08
• D)$1,409.54

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Definitions:

Simple Random Sample

A subset of individuals chosen from a larger set where each member has an equal chance of being selected.

Undergraduates

Students pursuing their first degree in a higher education institution, typically leading to a bachelor's degree.

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A quantity or characteristic that defines or constrains how a system or model operates, often used in statistics to describe a population.

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The level of education typically completed from grades 9 to 12, serving as the foundation for future college or vocational training.