Junker Rental Car has a contract with a garage for major repair service for $450 per car, every 6 months. Management estimates that for $350,000, the company could have its own facility, financed at 8% interest for 20 years, and a salvage value of $20,000. They will do their own car repairs at a cost of $200 per car, every 6 months. Ignoring taxes and other economic factors, what is the minimum number of cars needed to make the change feasible?
Junker Rental Car has a contract with a garage for major repair service for $450 per car, every 6 months. Management estimates that for $350,000, the company could have its own facility, financed at 8% interest for 20 years, and a salvage value of $20,000. They will do their own car repairs at a cost of $200 per car, every 6 months. Ignoring taxes and other economic factors, what is the minimum number of cars needed to make the change feasible?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EA: Gardner Denver Company is considering the purchase of a new piece of factory equipment that will...
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Junker Rental Car has a contract with a garage for major repair service for $450 per car, every 6 months. Management estimates that for $350,000, the company could have its own facility, financed at 8% interest for 20 years, and a salvage value of $20,000. They will do their own car repairs at a cost of $200 per car, every 6 months. Ignoring taxes and other economic factors, what is the minimum number of cars needed to make the change feasible?
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