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You just bought used car for $3,000 and, being enrolled in this course, you are anxious as to how long you must keep car. You will graduate soon and you don't want to keep car longer than 4 years. You have evaluated costs and market value as given in the following table.

Year 1 Year 2 Year 3 Year 4
Annual expense $950 $1050 $1,100 $1,500
Market value 2,250 1,800 1,450 1,160
at end of yr.

If your MARR is 12% per year, at the end of which year must you dispose of car?

Business Management, Management Studies

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