Q. 3. A drugstore chain has just purchased a fleet of five pickup trucks to be used for delivery in a particular city. Initial cost was $5000 per truck and the expected life and salvage value is 10 years and $600, respectively. The combine insurance, maintenance, gas and lubrication cost are expected to be $750 for the first year and to increase by $50 per year thereafter, while delivery service will bring an extra $2000 (revenue) in every 2 years for the company. If a return of 10% per year find the total cost of this investment.
Q. 3. A drugstore chain has just purchased a fleet of five pickup trucks to be used for delivery in a particular city. Initial cost was $5000 per truck and the expected life and salvage value is 10 years and $600, respectively. The combine insurance, maintenance, gas and lubrication cost are expected to be $750 for the first year and to increase by $50 per year thereafter, while delivery service will bring an extra $2000 (revenue) in every 2 years for the company. If a return of 10% per year find the total cost of this investment.
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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Transcribed Image Text:Q. 3. A drugstore chain has just purchased a fleet of five pickup trucks to be used for delivery in
a particular city. Initial cost was $5000 per truck and the expected life and salvage value is 10
years and $600, respectively. The combine insurance, maintenance, gas and lubrication cost are
expected to be $750 for the first year and to increase by $50 per year thereafter, while delivery
service will bring an extra $2000 (revenue) in every 2 years for the company. If a return of 10%
per year find the total cost of this investment.
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