Kamil Koç Transportation is considering two models of buses for newly opened routes. Bus Model 1 will have a first cost of $165541, an operating cost of $21571 per year, and a resale value of $98524 after 8 years. Bus Model 2 will have a first cost of $141284, an operating cost of $16917 per year, and also have a $34793 resale value, but after 4 years. At an interest rate of 3% per year, which model should the Kamil Koç buy based on an annual worth analysis? What is the annual worth and the present worth of the selected alternative?

Kamil Koç Transportation is considering two models of buses for newly opened routes. Bus Model 1 will have a first cost of $165541, an operating cost of $21571 per year, and a resale value of $98524 after 8 years. Bus Model 2 will have a first cost of $141284, an operating cost of $16917 per year, and also have a $34793 resale value, but after 4 years. At an interest rate of 3% per year, which model should the Kamil Koç buy based on an annual worth analysis? What is the annual worth and the present worth of the selected alternative?

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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