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Natasha Gurdin is debating which of two models of a car to buy ( A or B ), being indifferent with regard to their technical Performance. She has been told that the average monthly cost of owning Model A, based on LCC analysis, is $500
a) Using the following Data for Model B, Calculate its LCC and determine which model is best choice for Natasha

purchase Price $23000
Life Expectancy 4 years
Release VAlue $13000
Maintenance $1100 per year
Operational Cost $90 per month
car Insurance $1400 per year
MEan Time between Failures 14 months
Repair Cost per failure $650

b) Develop a general Model that can be used to calculate LCC for a Car.

Econometrics, Economics

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