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Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items: Present Car New Car Purchase cost new $32,000 Transmission and other repairs $8,000 Annual cash operating cost 13,000 10,000 Fair market value now 5,000 Fair market value in five years 1,000 5,000 If Pompeii's replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 10%. (Click here to see present value and future value tables) A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar. Present Car $ 53,181.50 X New Car 65,596 X B. What should Pompeii's do? Pompeii's should retain the present car v

Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items: Present Car New Car Purchase cost new $32,000 Transmission and other repairs $8,000 Annual cash operating cost 13,000 10,000 Fair market value now 5,000 Fair market value in five years 1,000 5,000 If Pompeii's replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 10%. (Click here to see present value and future value tables) A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar. Present Car $ 53,181.50 X New Car 65,596 X B. What should Pompeii's do? Pompeii's should retain the present car v

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter14: Pricing Techniques And Analysis
Section: Chapter Questions
Problem 1.1CE: What life cycle cost concept begins raising concerns by year 5 with any electric vehicle (EV)? If...
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Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items: Present Car New Car Purchase cost new $32,000 Transmission and other repairs $8,000 Annual cash operating cost 13,000 10,000 Fair market value now 5,000 Fair market value in five years 1,000 5,000 If Pompeii's replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 10%. (Click here to see present value and future value tables) A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar. Present Car $ 53,181.50| х New Car 65,596 x B. What should Pompeii's do? Pompeii's should retain the present car Feedback V Check Mv Work
Transcribed Image Text:Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items: Present Car New Car Purchase cost new $32,000 Transmission and other repairs $8,000 Annual cash operating cost 13,000 10,000 Fair market value now 5,000 Fair market value in five years 1,000 5,000 If Pompeii's replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 10%. (Click here to see present value and future value tables) A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar. Present Car $ 53,181.50| х New Car 65,596 x B. What should Pompeii's do? Pompeii's should retain the present car Feedback V Check Mv Work
Skip to Content EDD Home Help (DENA FARRAJ ) Log Out California Ccov Employment Development Departnent GOV Certify Payments History 1099G Profile Inbox Contact Claim History You can review your claim history, including transaction details, for previously certified weeks. For more explanation about the information on claim history, select Help at the top-right corner of the page. 123 Current Additional Views Benefit Week Ending Confirmation Reported Earnings Transaction Benefit Year Begins (Opens in new window) Method Status Authorized Date Number Details Amount 03/15/2020 10/24/2020 20201026W0182659 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 10/17/2020 20201026W0182659 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 10/10/2020 20201013W0301219 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 10/03/2020 20201013W0301219 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/26/2020 20200929W0112993 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/19/2020 20200929WO112993 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/12/2020 20200916W0299375 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/05/2020 20200916W0299375 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/29/2020 20200902W0586827 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/22/2020 20200902W0586827 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/15/2020 20200817W0368837 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/08/2020 20200817W0368837 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/01/2020 20200802W1247067 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 07/25/2020 20200802W1247067 UI Online Paid $1,050.00 $0.00 Transactions Certification 03/15/2020 07/18/2020 20200720W0490538 UI Online Paid $1,050.00 $0.00 Transactions Certification
Transcribed Image Text:Skip to Content EDD Home Help (DENA FARRAJ ) Log Out California Ccov Employment Development Departnent GOV Certify Payments History 1099G Profile Inbox Contact Claim History You can review your claim history, including transaction details, for previously certified weeks. For more explanation about the information on claim history, select Help at the top-right corner of the page. 123 Current Additional Views Benefit Week Ending Confirmation Reported Earnings Transaction Benefit Year Begins (Opens in new window) Method Status Authorized Date Number Details Amount 03/15/2020 10/24/2020 20201026W0182659 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 10/17/2020 20201026W0182659 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 10/10/2020 20201013W0301219 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 10/03/2020 20201013W0301219 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/26/2020 20200929W0112993 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/19/2020 20200929WO112993 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/12/2020 20200916W0299375 UI Online Paid $450.00 $0.00 Transactions Certification 03/15/2020 09/05/2020 20200916W0299375 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/29/2020 20200902W0586827 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/22/2020 20200902W0586827 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/15/2020 20200817W0368837 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/08/2020 20200817W0368837 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 08/01/2020 20200802W1247067 UI Online Paid $750.00 $0.00 Transactions Certification 03/15/2020 07/25/2020 20200802W1247067 UI Online Paid $1,050.00 $0.00 Transactions Certification 03/15/2020 07/18/2020 20200720W0490538 UI Online Paid $1,050.00 $0.00 Transactions Certification
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