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

question 87

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

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Definitions:

Market Development

A growth strategy where a business seeks to sell its existing products or services into new geographic areas or markets to attract new customers.

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A strategy to increase sales of existing products or services on current markets, thereby increasing the market share.

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