You would like to work part time in the meal delivery service to help pay your way through your Engineering program. The cost of the e-bike is $4000. Operating costs are $200 per year for maintenance and $300 at the end of every second year to replace the tires so you can ride an additional two years without getting a flat. You expect the program to take 6 years to complete and you expect to be able to sell the bike at the end of that time
You would like to work part time in the meal delivery service to help pay your way through your Engineering program. The cost of the e-bike is $4000. Operating costs are $200 per year for maintenance and $300 at the end of every second year to replace the tires so you can ride an additional two years without getting a flat. You expect the program to take 6 years to complete and you expect to be able to sell the bike at the end of that time
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8PB: D**M Pizza has a delivery car that is uses for pizza deliveries. The transmission needs to be...
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You would like to work part time in the meal delivery service to help pay your way through your Engineering program. The cost of the e-bike is $4000. Operating costs are $200 per year for maintenance and $300 at the end of every second year to replace the tires so you can ride an additional two years without getting a flat. You expect the program to take 6 years to complete and you expect to be able to sell the bike at the end of that time for $1000. How much do you need to earn each year (within $20) to offset those costs (to break even)? MARR=7%
a. 922
b. 962
c. 1002
d. 1042
e. None of the above
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