Question - Terry's 5-year-old Nissan Murano requires repairs estimated a $2,000 to make it roadworthy again. His friend, Carol, suggested that he should buy a 5-year old used Ford Fusion instead for $2,000 cash. Carol estimated the following cost for the two cars:
Nissan Murano Ford Fusion
Acquisition cost $25,000 $2,000
Repairs $2,000 -----
Annual operating costs
(Gas, Maintenance, insurance $2,280 $1,900
a. The cost(s) NOT relevant for this decision is(are)
b. What should Terry do? What are is savings in the first year?
c. What are other factors to consider?