Orlando is considering the purchase of a new Truck. The options are Truck 1, and

Question

Orlando is considering the purchase of a new Truck. The options are Truck 1, and Truck 2. The appropriate financial data are as follows:

Truck 1 Truck 2

Capital Investment $50,000 $64,000

Maintenance cost/year   $6,000   $5,000

Useful Life   6 years   6 years

Reduction in damages $20,000 $22,000

What is the B/C for Truck 1? Term 1 1.41

0.87

1.64

1.10

1.15

Neither

Truck 1 or Truck 2

Truck 1

Truck 2

Both Truck 1 and Truck 2

Which truck should be purchased? Term 2 1.4

10.87

1.64

1.10

1.15

Neither

Truck 1 or Truck 2

Truck 1

Truck 2

Both Truck 1 and Truck 2

Explanation / Answer

11.41 : 1.15 both truck

21.4 : truck 2

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