For some years, Mel has contracted with several major pizza retailers for home delivery services. He uses a MARR of 12% per year in all business dealings. His current van, purchased 10 years ago for $75,000, can be used for 3 more years, with an AOC of $23,000 and an estimated $25,000 trade-in value. A better-equipped van will cost $130,000, have an economic life of 6 years, an estimated trade-in value of $45,000, an AOC of $32,000 per year, and will generate an estimated $35,000 per year additional revenue. On the basis of these estimates, what market value now for the current van will make the new van equally attractive? Solve by spreadsheet or factors, as requested by your instructor. On equating the AW values of the current van and the new van, to calculate the market value now for the current van, the spreadsheet tool that should be used is GOAL SEEK The market value now for the current van that will make the new van equally attractive will be $
For some years, Mel has contracted with several major pizza retailers for home delivery services. He uses a MARR of 12% per year in all business dealings. His current van, purchased 10 years ago for $75,000, can be used for 3 more years, with an AOC of $23,000 and an estimated $25,000 trade-in value. A better-equipped van will cost $130,000, have an economic life of 6 years, an estimated trade-in value of $45,000, an AOC of $32,000 per year, and will generate an estimated $35,000 per year additional revenue. On the basis of these estimates, what market value now for the current van will make the new van equally attractive? Solve by spreadsheet or factors, as requested by your instructor. On equating the AW values of the current van and the new van, to calculate the market value now for the current van, the spreadsheet tool that should be used is GOAL SEEK The market value now for the current van that will make the new van equally attractive will be $
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![For some years, Mel has contracted with several major pizza retailers
for home delivery services. He uses a MARR of 12% per year in all
business dealings. His current van, purchased 10 years ago for
$75,000, can be used for 3 more years, with an AOC of $23,000 and
an estimated $25,000 trade-in value. A better-equipped van will cost
$130,000, have an economic life of 6 years, an estimated trade-in value
of $45,000, an AOC of $32,000 per year, and will generate an
estimated $35,000 per year additional revenue. On the basis of these
estimates, what market value now for the current van will make the
new van equally attractive? Solve by spreadsheet or factors, as
requested by your instructor.
On equating the AW values of the current van and the new van, to
calculate the market value now for the current van, the spreadsheet
tool that should be used is GOAL SEEK
The market value now for the current van that will make the new van
equally attractive will be $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff5f61ce7-c4be-4d9c-8812-77e0c0cd9569%2F6d7b31f2-4b56-42ff-82d3-452f9fac7551%2Fh1zqf2_processed.png&w=3840&q=75)
Transcribed Image Text:For some years, Mel has contracted with several major pizza retailers
for home delivery services. He uses a MARR of 12% per year in all
business dealings. His current van, purchased 10 years ago for
$75,000, can be used for 3 more years, with an AOC of $23,000 and
an estimated $25,000 trade-in value. A better-equipped van will cost
$130,000, have an economic life of 6 years, an estimated trade-in value
of $45,000, an AOC of $32,000 per year, and will generate an
estimated $35,000 per year additional revenue. On the basis of these
estimates, what market value now for the current van will make the
new van equally attractive? Solve by spreadsheet or factors, as
requested by your instructor.
On equating the AW values of the current van and the new van, to
calculate the market value now for the current van, the spreadsheet
tool that should be used is GOAL SEEK
The market value now for the current van that will make the new van
equally attractive will be $
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