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  3. the interest rate is 10% in the market. assume tha

The interest rate is 10% in the market. Assume that 3 years ago, you purchased...

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Accounting

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The interest rate is 10% in the market. Assume that 3 years ago, you purchased a vehicle for 300,000. You can keep using this vehicle for a maximum of 3 more years. In this case the operating and maintenance cost will be 55,000 which is paid at the end of each year. The salvage value is expected to be 70,000$ after 3 years. A company visits you with a proposal. They want to buy your vehicle now for 250,000t. If you sell your vehicle to this company, you can buy a new vehicle at an initial cost of 400,000, with a maintenance and operating cost of 30,000$ per year for the following 3 years. The salvage value is 120,000 after its 3 year life. Determine the replacement value of the defender and determine whether to sell your current vehicle today or not. n F/P P/F A/F A/P F/A 1 2. 3 4 5 1.100 1.210 1.331 1.464 1.611 .9091 .8264 .7513 .6830 .6209 1.0000 .4762 .3021 .2155 .1638 1.1000 .5762 .4021 .3155 2638 1.000 2.100 3.310 4.641 6.105 P/A 0.909 1.736 2.487 3.170 3.791 6 7 8 9 10 1.772 1.949 2.144 2.358 2.594 .5645 .5132 .4665 .4241 .3855 .1296 .2296 .1054 .2054 .0874 .1874 .0736 .1736 .0627 .1627 Factor table for 10% 7.716 9.487 11.436 13.579 15.937 4.355 4.868 5.335 5.759 6.145

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