Answer the Following Question(s)using the Information Below

question 8

Multiple Choice

Answer the following question(s) using the information below.Jim's 5-year-old Geo Prizm requires repairs estimated at $3,000 to make it road worthy again.His friend, Julie, suggested that he should buy a 5-year-old used Honda Civic instead for $3,000 cash.Julie estimated the following costs for the two cars:

-The cost NOT relevant for this decision is the

• A)acquisition cost of the Geo Prizm.
• B)acquisition cost of the Honda Civic.
• C)repairs to the Geo Prizm.
• D)annual operating costs of the Honda Civic.
• E)annual operating costs of the Geo Prizm.

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Definitions:

Legal Owner

The person or entity that has legal title or ownership of property or assets.

Tax Benefits

Financial advantages that result from specific tax law provisions, often designed to encourage certain business investments or activities.

Original Investment

This refers to the initial amount of money invested in a project, asset, or financial instrument.

PV Of CCA

Present value of capital cost allowance, representing the discounted value of tax deductions from depreciation of assets over time.