Contemporary Engineering Economics 6th Edition by Chan Park

Exercise 54

You are considering two types of automobiles. Model A costs $18,000 and model B costs $15,624. Although the two models are essentially the same, after four years of use, model A can be sold for $9,000, while model B can be sold for $6,500. Model A commands a better resale value because its styling is popular among young college students. Determine the rate of return on the incremental investment of $2,376. For what range of values of your MARR is model A preferable