Because of its age, your car costs $4000 annually in maintenance expense. You could replace it with a newer vehicle costing $8000. Both vehicles would be expected to last four more years. If your opportunity cost is 8%, by how much must maintenance expense decrease on the newer vehicle to justify its purchase?© BrainMass Inc. brainmass.com March 21, 2019, 5:18 pm ad1c9bdddf
The Excel file shows calculations of decrease in maintenance expense on the newer vehicle to justify its purchase.