A company plans to buy a new delivery truck for pizza delivery for $30,000 which will generate $5,000 in added revenue per year. The truck comes with four years of prepaid maintenance and then maintenance will start in year five and will be $500 every six months. Insurance will be $600 per year increasing by 10% per year. The plan is to sell the vehicle at the end of 10 years and receive 20% of the purchase price for it. Show the cash flow diagram.
A company plans to buy a new delivery truck for pizza delivery for $30,000 which will generate $5,000 in added revenue per year. The truck comes with four years of prepaid maintenance and then maintenance will start in year five and will be $500 every six months. Insurance will be $600 per year increasing by 10% per year. The plan is to sell the vehicle at the end of 10 years and receive 20% of the purchase price for it. Show the cash flow diagram.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A company plans to buy a new delivery truck for pizza delivery for $30,000 which will generate $5,000 in added revenue per year. The truck comes with four years of prepaid maintenance and then maintenance will start in year five and will be $500 every six months. Insurance will be $600 per year increasing by 10% per year. The plan is to sell the vehicle at the end of 10 years and receive 20% of the purchase
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