Purchase a new Corolla for $22,000, It was damage because of hail insurance pays
ID: 2449130 • Letter: P
Question
Purchase a new Corolla for $22,000, It was damage because of hail insurance pays 2,900 ($3,400 appraisal, - $500 deductable) repair damage cost 2,900, but value car will reduced 2,000 because of accident report Net replacement cost same model, year, color $ 3,500 (out of pocket after trade in the old one) 1. conduct a cost/ benefit analysis using a typical 2x2 matrix repair replace with new net different benefit ? ? ? cost ? ? ? Net benefit ? ? ? Purchase a new Corolla for $22,000, It was damage because of hail insurance pays 2,900 ($3,400 appraisal, - $500 deductable) repair damage cost 2,900, but value car will reduced 2,000 because of accident report Net replacement cost same model, year, color $ 3,500 (out of pocket after trade in the old one) 1. conduct a cost/ benefit analysis using a typical 2x2 matrix repair replace with new net different benefit ? ? ? cost ? ? ? Net benefit ? ? ?Explanation / Answer
Solution :
repair
replace with new
net different
benefit
0
0
0
cost
*0
3500
-3500
Net benefit
0
-3500
3500
* 2900 repair exp - 2900 received from insurance company
Hence its better to get it repaired.
repair
replace with new
net different
benefit
0
0
0
cost
*0
3500
-3500
Net benefit
0
-3500
3500
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