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A scrap metal dealer purchased a truck for $45,000, and the maintenance cost for the truck was $890 per month, with average revenues of $5,000 per month. The truck was sold in two years for $12,000.The rate of return equation in PW terms is: Select one: a. 45,000-890(P/F,1%,24)+5,000(P/A,1%,24)+12K(P/F, 1%,24) = 0 b. -45,000+4,110(P/A,1%,24)+12,000(P/F,1%,24) = 0 c. -45,000+4,110(P/A,1%,24)-12,000(P/A,1%,24) = 0 %3D d. -45,000+5,000(P/A,1%,24)+12,000(P/F,1%,24) = 0

A scrap metal dealer purchased a truck for $45,000, and the maintenance cost for the truck was $890 per month, with average revenues of $5,000 per month. The truck was sold in two years for $12,000.The rate of return equation in PW terms is: Select one: a. 45,000-890(P/F,1%,24)+5,000(P/A,1%,24)+12K(P/F, 1%,24) = 0 b. -45,000+4,110(P/A,1%,24)+12,000(P/F,1%,24) = 0 c. -45,000+4,110(P/A,1%,24)-12,000(P/A,1%,24) = 0 %3D d. -45,000+5,000(P/A,1%,24)+12,000(P/F,1%,24) = 0

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
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A scrap metal dealer purchased a truck for $45,000, and the maintenance cost for the truck was $890 per month, with average revenues of $5,000 per month. The truck was sold in two years for $12,000.The rate of return equation in PW terms is: Select one: a. 45,000-890(P/F,i%,24)+5,000(P/A,i%,24)+12K(P/F,i%,24) = 0 b. -45,000+4,110(P/A,i%,24)+12,000(P/F,i%,24) = 0 C. -45,000+4,110(P/A,i%,24)-12,000(P/A,i%,24) = 0 d. -45,000+5,000(P/A,1%,24)+12,000(P/F,i%,24) = 0
Transcribed Image Text:A scrap metal dealer purchased a truck for $45,000, and the maintenance cost for the truck was $890 per month, with average revenues of $5,000 per month. The truck was sold in two years for $12,000.The rate of return equation in PW terms is: Select one: a. 45,000-890(P/F,i%,24)+5,000(P/A,i%,24)+12K(P/F,i%,24) = 0 b. -45,000+4,110(P/A,i%,24)+12,000(P/F,i%,24) = 0 C. -45,000+4,110(P/A,i%,24)-12,000(P/A,i%,24) = 0 d. -45,000+5,000(P/A,1%,24)+12,000(P/F,i%,24) = 0
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