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John's 8-year-old Car requires repairs estimated at $11000 to make it road wort...
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John's 8-year-old Car requires repairs estimated at $11000 to make it road worthy again. His wife suggested that he should buy a 5-year-old used Jeep instead for $11000 cash. Estimated costs for the two cars are the following:
|
8-yr-old Car
|
Jeep
|
Acquisition cost
|
$30000
|
$11000
|
Repairs
|
$11000
|
—
|
Annual operating costs
|
|
|
(Gas, maintenance, insurance)
|
$2491
|
$2174
|
What should John do? What are his savings in the first year?
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