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Comparing two car purchase proposals

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Based on financial and opportunity costs, which of the following do you believe would be the wiser purchase?
Vehicle 1: A 3 year old car with 45,000 miles, costing $6,700, and requiring $385 of immediate repairs.
Vehicle 2: A 5 year old car with 62,000 miles, costing $4,500, and requiring $760 of immediate repairs.

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Solution Summary

This solution compares two proposals for a car purchase.

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Solution:

Current Cost of Vehicle1 = 6700+385=$7085
Current Cost of Vehicle2 = 4500+760=$5260

If we look at the current financial costs only, Vehicle 2 is preferable as ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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