The given applies to both parts:
Jerry's 5-year Chevy Geo Prism requires $3,000 in estimated repairs. His friend suggested that he buy a 5-year Honda Civic for the $3,000 cash. The following is the estimated costs for the two cars:
Chevy Geo Prism Honda Civic
Acquistion cost $15,000 $3,000
Repairs $3,000 -----
Annual operating costs $2,280 $2,100
(Gas, maintenance, & insurance)
Question 1) The cost NOT relevant for this decision is __________.
acquisition cost of the Honda Civic, acquistion cost of the Geo Prism, repairs to the Geo Prism, or annual operating costs of the Honda Civic
Question 2) What should Jerry do? What is his savings in the first year?
Buy Honda Civic, $9,780, Buy Honda Civic, $180, Fix Geo Prism, $5,518, or none of these