The life of a car is a random variable with distribution F. An individual has a policy of trading in his car either when it fails or reaches the age of A. Let R(A) denote the resale value of an A-year-old car. There is no resale value of a failed car. Let C1 denote the cost of a new car and suppose that an additional cost C2 is incurred whenever the car fails.(a) Say that a cycle begins each time a new car is purchased. Compute the long-run average cost per unit time.(b) Say that a cycle begins each time a car in use fails. Compute the long-run average cost per unit time.

pur-new-sol

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