Walt Wallace Construction Enterprises may buy a new dump truck with a 10-year li
ID: 1099933 • Letter: W
Question
Walt Wallace Construction Enterprises may buy a new dump truck with a 10-year life. Interest is 9%. The cash flows for two likely models are as follows:
Model
First Cost
Annual Operating Cost
Annual Income
Salvage Value
A
$50,000
$12,000
$19,000
$10,000
B
$80,000
$11,000
$22,000
$30,000
Using present worth analysis, which truck should the firm buy?
Neither Model A nor Model B
Either Model A or Model B
Model A
Model B
Model
First Cost
Annual Operating Cost
Annual Income
Salvage Value
A
$50,000
$12,000
$19,000
$10,000
B
$80,000
$11,000
$22,000
$30,000
Explanation / Answer
Model B
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.