MCQs>Finance & Management>Operations Research>The price of a new car is $30000. The annual maintenance cost of the car for the first five years is $8000, $10000, $14000, $18000 and $24000 respectively. If the re-sale value decreases by 5% of the purchase price each year, calculate the best time to have the car replaced.
Operations Research MCQs
The price of a new car is $30000. The annual maintenance cost of the car for the first five years is $8000, $10000, $14000, $18000 and $24000 respectively. If the re-sale value decreases by 5% of the purchase price each year, calculate the best time to have the car replaced.
Answer
Correct Answer: The 1st year is the optimal replacement time.
Explanation:
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