5. The average car depreciates at a rateof 20% the first year after purchaseand 15% every year thereaften If theoriginal purchase price of a car is$25,000, which of the following functions fOmodels the worth of a car, in dollars, tyearsafter its purchase?A) () 20,000(1-0.15)OB) /()= 20,000(1-0.15)CY F-25,000(1-0.20)"OC) f)=O D) f 25,000(1-0.15)'astant,smis

Cashflows means movement of cash. This movement can be positive and negative. Positive movement…

Answered: 5. The average car depreciates at a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Suppose a new car is purchased for $45,357 and depreciates by 21% over the first year of ownership. If the car is driven 12,470 miles in that year, what is the cost, in dollars per 100 miles driven, for depreciation? (Enter a number. Round your answer to the nearest cent.) dollars per 100 miles)
Suppose a new car is purchased for $45,357 and depreciates by 21% over the first year of ownership. If the car is driven 12,870 miles in that year, what is the cost, in dollars per 100 miles driven, for depreciation? (Enter a number. Round your answer to the nearest cent.)
Suppose a new car is purchased for $61,000 and depreciates by 28% over the first year of ownership. If the car is driven 14,400 miles in that year, what is the cost (in dollars) per mile for depreciation. Round your answer to the nearest cent.
You bought a car 5 years ago for $30,000. This type of car is known to depreciate at a compounded annual rate of 8% per year (given normal mileage and wear-and-tear). If your car depreciated at this rate, how much is it worth today? (Hint: let r = -0.08 and solve for FV).
A truck was purchased for $58,000 and depreciates $6560 per year. Suppose that the vehicle is depreciated so that it holds 60% of its value from the previous year. Write an exponential function of the form =yV0bt , where V0 is the initial value and t is the number of years after purchase.
What is the depreciation using straight line deprectiation over 12 years, what is the revenue earned each year, and what are total taxes with a maginal rate of 40%? Price per bus $225,500 Units sold per year 7,750 Labor cost per bus $52,000 Components & Parts $94,000 Selling General & Administrative $250,000,000 per year NOTE: Average warranty cost per year per bus for the first five years is $1,100. The present value of this cost will be used as a cost figure for each bus. Afterwards, the bus operator will become responsible the repairs on the buses. PV of bus warranty = 4,776 NOTE: There is a marginal tax rate of 40% The buses can be produced for twelve years. Afterwards, the designs become obsolete. Engine Detroit engines Price per engine, including installation $20,000 Average annual warranty cost per year Present Value = $6,512 $1,000 The engine will be…
What is the cost per mile over the course of a year for a $30000 car that depreciates 20%?
A car depreciates exponentially at a rate of 5% per year. If the car is worth $30,000 after 9 months, what was the original price of the car?
A company buys a car for £60,000 and expects it to have a useful life of 5 years. It depreciates the car at 50% reducing balance and sells it after 3 years for £30,000. What is the profit on disposal? A £6,000 B £15,000 C £18,000 D £22,500
The value of an automobile depreciates at the rate of 15% per year. What will be the value of an automobile 3 years hence which is now purchased for P45,000? Complete and clear solution must be shown.
24. Steven found that the value of his new car is currently $31,200 and willdepreciate 6.9% per year. Based on the rate of depreciation, find the value ofhis car in 5 years. A. $21,822.42B. $20,436.00C. $6,240.00D. $15,600.00
TransITRI is a transportation company with a recent need of a new construction equipment at a first cost of $78,000 (Equation (1)), zero salvage value, and a cash flow before taxes (CFBT) per year t that follows Equation (2). CFBT = $30,000 – 3,000t (for t = 1, 2, … T) (1) CFBT = - $78,000 (for t =0) (2) Calculate the PW if the economic life of similar machinery is 7 years, while the MARR is 16%

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS