Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $124,000 to provide short-haul earth-moving services. The company sold it today for $45,000. Operating and maintenance costs averaged $11,300 per year. A complete overhaul at the end of year 3 costs an extra $3600. Calculate the annual cost of the truck at i = 8% per year.
Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $124,000 to provide short-haul earth-moving services. The company sold it today for $45,000. Operating and maintenance costs averaged $11,300 per year. A complete overhaul at the end of year 3 costs an extra $3600. Calculate the annual cost of the truck at i = 8% per year.
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 2P
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Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $124,000 to provide short-haul earth-moving services. The company sold it today for $45,000. Operating and maintenance costs averaged $11,300 per year. A complete overhaul at the end of year 3 costs an extra $3600.
Calculate the annual cost of the truck at i = 8% per year.
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