You have an old car worth $9,000 if sold today. You could overhaul this car at a cost of $5,000, and it would last you about 6 more years at which time you could sell it for $1,000. Alternately, you could purchase a new car. It would cost $22,000 and would last you approximately 6 years. After 6 years it would be worth $3,000. Your cost of funds is 10%. Prepare an evaluation of your choices. Show your work and indicate which of the alternatives you would choose.
