A firm is trying to decide between two types of trucks, one a conventional gasoline vehicle and the other a diesel powered. The following information is available. Gasoline $31,000 3 years $8,000 $0.41 Initial investment Useful life Salvage value Operating cost per mile With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent. . For 17,000 miles per year in travel, which truck should be recommended? Click the icon to view the interest and annuity table for discrete compounding when /-4% per year. The annual mileage at which the two trucks are equivalent is miles (Round to the nearest whole number.) Diesel $23,000 2 years $5,000 $0.33

A firm is trying to decide between two types of trucks, one a conventional gasoline vehicle and the other a diesel powered. The following information is available. Gasoline $31,000 3 years $8,000 $0.41 Initial investment Useful life Salvage value Operating cost per mile With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent. . For 17,000 miles per year in travel, which truck should be recommended? Click the icon to view the interest and annuity table for discrete compounding when /-4% per year. The annual mileage at which the two trucks are equivalent is miles (Round to the nearest whole number.) Diesel $23,000 2 years $5,000 $0.33

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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Question

A firm is trying to decide between two types of trucks, one a conventional gasoline vehicle and the other a diesel powered. The following information is available.
Gasoline
$31,000
3 years
$8,000
$0.41
Initial investment
Useful life
Salvage value
Operating cost per mile
a. With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent.
. For 17,000 miles per year in travel, which truck should be recommended?
Click the icon to view the interest and annuity table for discrete compounding when /-4% per year.
The annual mileage at which the two trucks are equivalent is miles. (Round to the nearest whole number)
Diesel
$23,000
2 years
$5,000
$0.33

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