Engineering Economy 16th Edition by William Sullivan ,Elin Wicks, Koelling,

Exercise 4

Tyler just wrecked his new Nissan, and the accident was his fault. The owner of the other vehicle got two estimates for the repairs: one was for $803 and the other was for $852. Tyler is thinking of keeping the insurance companies out of the incident to keep his driving record "clean." Tyler's deductible on his comprehensive coverage insurance is $500, and he does not want his premium to increase because of the accident. In this regard, Tyler estimates that his semiannual premium will rise by $60 if he files a claim against his insurance company. In view of the above information, Tyler's initial decision is towrite a personal check for $803 payable to the owner of the other vehicle. Did Tyler make the most economical decision What other options should Tyler have explored In your answer, be sure to state your assumptions and quantify your thinking.