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he wishes to know what the annual cost, at the economic life, will be for a van with the following characteristic:

he wishes to know what the annual cost, at the economic life, will be for a van with the following characteristic:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An electrical contractor has in his service a fleet of 10 vans of varying ages. With a view to

standardizing his fleet with a single make, he wishes to know what the annual cost, at the

economic life, will be for a van with the following characteristic:

 

 

All cost is in constant dollars. His opportunity cost of capital before taxes is 20 percent. A

before-tax analysis is required

Life First Cost Operational Cost 13.200 345WNIO 0 1 2 6 2.160 2.160 2.160 2.160 2.160 2.160 Maintenance Cost Salvage Value 880 1.980 3.080 4.180 5.280 6.380 9.080 7.340 5.600 3.860 2.120 380
Transcribed Image Text:Life First Cost Operational Cost 13.200 345WNIO 0 1 2 6 2.160 2.160 2.160 2.160 2.160 2.160 Maintenance Cost Salvage Value 880 1.980 3.080 4.180 5.280 6.380 9.080 7.340 5.600 3.860 2.120 380
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