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,at which point they will be valueless.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
Correct Answer:
Verified
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