Calculate the Annual worth.

Question

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Answer 1

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 2

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 3

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 4

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 6

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 7

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Answer 8

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345