The purchase of a used pickup truck for $9,000 is being considered. Fuel and maintenance $1,980 per year if the truck is driven 16,000 kilometers, and vary directly with mileage. Asu vill keep and use the truck for 5 years. The salvage value after five years of use decreases (f original purchase price) by $0.05 per kilometer driven during that entire period. a) Find the equivalent uniform annual cost, rounded to the nearest dollar, if the interest ra b) If the annual mileage is instead 24,000 km, what would the EUAC be? c) If the annual mileage is instead 8,000 km, what would the EUAC be?
The purchase of a used pickup truck for $9,000 is being considered. Fuel and maintenance $1,980 per year if the truck is driven 16,000 kilometers, and vary directly with mileage. Asu vill keep and use the truck for 5 years. The salvage value after five years of use decreases (f original purchase price) by $0.05 per kilometer driven during that entire period. a) Find the equivalent uniform annual cost, rounded to the nearest dollar, if the interest ra b) If the annual mileage is instead 24,000 km, what would the EUAC be? c) If the annual mileage is instead 8,000 km, what would the EUAC be?
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:5. Problem 5
The purchase of a used pickup truck for $9,000 is being considered. Fuel and maintenance costs are
$1,980 per year if the truck is driven 16,000 kilometers, and vary directly with mileage. Assume you
will keep and use the truck for 5 years. The salvage value after five years of use decreases (from the
original purchase price) by $0.05 per kilometer driven during that entire period.
(a) Find the equivalent uniform annual cost, rounded to the nearest dollar, if the interest rate is 8%.
(b) If the annual mileage is instead 24,000 km, what would the EUAC be?
(c) If the annual mileage is instead 8,000 km, what would the EUAC be?
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