You are planning to move to the UAE. The plan is to stay there for...
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You are planning to move to the UAE. The plan is to stay there for 3 years. The fuel price is 3.5 AED/L. Your monthly driving distance is 1200km. You have been introduced to the following transportation options: A. Rent a car for a monthly rent of 1500 AED. Fuel consumption rate 6.7 1/100km. B. Buy a car (price equals 20000 AED). Fuel consumption rate 11 l/100km. C. Buy a car (price 60000 AED. Fuel consumption rate 9 1/100km The operation and maintenance costs, and the salvage value of each option are shown in the following table. B c registration (AED/a) 2000 2000 maintenance (AED/a) 3000 1500 Salvage value (AED) 10 8000 44000 10 From the economic point of view, which option will you choose? This discount rate is 3%
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