Question

Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $53,000. The object is to save on horse transporter rentals. Marsha had been renting a transporter every other week for $218 per week plus $1.90 per mile. Most of the trips are 90 miles in total. Marsha usually gives the driver a $35 tip. With the new transporter she will only have to pay for diesel fuel and maintenance, at about $.63 per mile. Insurance costs for Marsha's transporter are $2,100 per year. The transporter will probably be worth $33,000 (in real terms) after eight years, when Marsha's horse Nike will be ready to retire. Assume a nominal discount rate of 8% and a forecasted inflation rate of 3%. Marsha's transporter is a personal ou a not a usness or financial investment, so axes can be ignored. nt A numbers gr enn e ques on aren real terms. Assume Calculate the NPV of the investment. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) NPV a en ot ear or smpi Cty. $-13179

an explanation would be great!

Answer 1

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htominal distort ro Real distoun fale t-+ In-fla-bon vole 8 1+3ヅ 1t 0.a8 Real diScount - 85 i. 0S Annu S tenf X number o uees tent- 수n nu al Saring Son

Hoxi vips ale 0 mile, per da chare,o x1-a6 = $176.4 Mpu maintance :- 147 Caleul aton ol ncl a Savin a S e anna

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