The defender and the challenger

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Reference no: EM131315083

Maria is tired of driving the old used car she bought 2 years ago for $18,000. She estimates it is worth about $8,000 now. A car salesman gave her this deal: "Look, I'll give you $10,000 in trade for this year's model. This is a $2,000 more than you expected and is $3,000 more than the current official Kelly Blue Book value. Our sales price for your new car is only $28,000 which is $6,000 less than the manufacturer'ssticker price of $34,000. Considering the extra $3,000 on the trade in , and $6,000 reduction from the sticker, you are paying $9,000 less for the new car. So I am giving you a great deal, and you get $2,000 more for your old clunker than you estimated it was worth. So, let's trade no. Okay?" If Maria were to perform a replacement study at this moment, what is the correct answer first cost for:

A. The defender

B. The challenger

Reference no: EM131315083

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