D00 and a remaining useful life of five years. At the end of the five years the spotter truck will have a zero-salvage value. ISooky canve $32,70o0 in return for trading in its old spotter truck. The old spotter truck has varlable manufacturing costs of $92,000 per year.ing costs by $26,700 per year over the five-year life of the new spotter truck. The total Increase or decrease in Income by Sooky has a spotter truck with a book value of $57,000 and a remaining useful Ilfe of five years. At the end of the five years the spottepurchase a new spotter truck for $137,000 and receive $32,700 in return for tradlng in Its old spotter truck. The old spotter truck hasThe new spotter truck will reduce varlable manufacturing costs by $26,700 per year over the five-year Iife of the new spotter truck.replacing the current spotter truck with the new truck is:Multiple Cholce$29,200 decrease$29,200 increase$32,700 increase$137,000 decrease$32,700 decrease

The purchase of new non cash assets in exchange of old asset, can lead to increase revenue for the…

Do and a remaining useful Iife of five years. At the end of the five years the spotter truck will have a zero-salvage value. ISooky can e $32,70O In return for trading in its old spotter truck. The old spotter truck has varlable manufacturing costs of $92,000 per year ng costs by $26,700 per year over the five-year life of the new spotter truck. The total Increase or decrease In lncome by

Do and a remaining useful Iife of five years. At the end of the five years the spotter truck will have a zero-salvage value. ISooky can e $32,70O In return for trading in its old spotter truck. The old spotter truck has varlable manufacturing costs of $92,000 per year ng costs by $26,700 per year over the five-year life of the new spotter truck. The total Increase or decrease In lncome by

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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Sooky has a spotter truck with a book value of $46,000 and a remaining useful life of five years. At the end of the five years the spotter truck will have a zero-salvage value. iSooky can purchase a new spotter truck for $126,000 and receive $31,600 in return for trading in its old spotter truck. The old spotter truck has variable manufacturing costs of $81,000 per year. The new spotter truck will reduce variable manufacturing costs by $25,600 per year over the five-year life of the new spotter truck. The total increase or decrease in income by replacing the current spotter truck with the new truck is:
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