Cost of Ownership of a Car
Suppose a car costs $20,000 in period 0, requires $1,000 of fuel in each of years 1-5 and is sold at the end of year 5 for $12,000. If the interest rate is 5%, what is the net present value of owning and driving the car?
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Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 03/06/2010
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