A transport company intends to periodically renew its fleet. . The new vehicle costs Cr$100,000.00 . The depreciation is exponential, 20% per year . A jury tax is 10% per year. . The cost of operation grows with the identity of the vehicle: year1 year2 year3 year4 cost 17,000 20,000 25,000 35,000 Knowing that the renovation of the fleet will always be done through the purchase of new cars, with what kind of vehicles should be replaced. (Answer: The vehicles will have to be replaced after 3 years).

A transport company intends to periodically renew its fleet. . The new vehicle costs Cr$100,000.00 . The depreciation is exponential, 20% per year . A jury tax is 10% per year. . The cost of operation grows with the identity of the vehicle: year1 year2 year3 year4 cost 17,000 20,000 25,000 35,000 Knowing that the renovation of the fleet will always be done through the purchase of new cars, with what kind of vehicles should be replaced. (Answer: The vehicles will have to be replaced after 3 years).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 10P

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A transport company intends to periodically renew its fleet. . The new vehicle costs Cr$100,000.00 . The depreciation is exponential, 20% per year . A jury tax is 10% per year. . The cost of operation grows with the identity of the vehicle: cost year1 year2 year3 17,000 20,000 25,000 year4 35,000 Knowing that the renovation of the fleet will always be done through the purchase of new cars, with what kind of vehicles should be replaced. (Answer: The vehicles will have to be replaced after 3 years).
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