ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Salim Service company owns several taxis that were purchased four years ago for
$27000 each. The current market value is $10000 each. If they are kept for another
6 years, they can be sold for $2000 each. The annual maintenance cost per cab is
$900 a year. Salim Service is looking at replacing the cabs with the option to lease
new cabs at an annual cost of $9000 per year per cab which includes free
maintenance. How much more would it cost them per year to switch to leasing?
Assume an interest rate of 9%.
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Transcribed Image Text:Salim Service company owns several taxis that were purchased four years ago for $27000 each. The current market value is $10000 each. If they are kept for another 6 years, they can be sold for $2000 each. The annual maintenance cost per cab is $900 a year. Salim Service is looking at replacing the cabs with the option to lease new cabs at an annual cost of $9000 per year per cab which includes free maintenance. How much more would it cost them per year to switch to leasing? Assume an interest rate of 9%.
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