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A company buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, al quartor made into

A company buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, al quartor made into

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A company buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, equal quarterly payments are made into a fund that earns 8% p.a., starting one quarter from now. If the vehicle now owned is sold in part payment for a new vehicle, the quarterly payments (to the nearest cent) made into the sinking fund are equal to R
Transcribed Image Text:A company buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, equal quarterly payments are made into a fund that earns 8% p.a., starting one quarter from now. If the vehicle now owned is sold in part payment for a new vehicle, the quarterly payments (to the nearest cent) made into the sinking fund are equal to R
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