4- A major repair on the suspension system of a 5-year-old car cost $2000 because the warranty expired after 3 years of ownership. The cost of periodic maintenance has been $800 every 2 years. If the owner donates the car to charity after 8 years of ownership, what is the equivalent annual cost of the repair and maintenance in the 8-year period of ownership? Use an interest rate of 8% per year, and assume that the owner paid the $800 maintenance cost immediately before donating the car in year 8.

4- A major repair on the suspension system of a 5-year-old car cost $2000 because the warranty expired after 3 years of ownership. The cost of periodic maintenance has been $800 every 2 years. If the owner donates the car to charity after 8 years of ownership, what is the equivalent annual cost of the repair and maintenance in the 8-year period of ownership? Use an interest rate of 8% per year, and assume that the owner paid the $800 maintenance cost immediately before donating the car in year 8.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.19E

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