THINGS tion 23 red out of uestion Blue Sky Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $58, purchased nine years ago. It has a book value of $7,000. According to the mechanic who serviced the truck during its the old truck has 3 years of useful life left. Blue Sky Catering wants to purchase a brand-new truck. The new truck costs $62,000 and has a 10-year useful life, a have no salvage value. The new truck is a little larger and would accommodate larger jobs, leading to an additional contribution margin. It would also have a refrigerated section that would reduce waste by $500 each year. As the tr repairs and maintenance costs will also decrease from $2,100 to $1,300 annually. The old truck can be sold for $8,0 Prepare a quantitative analysis to determine whether or not to purchase the new truck. Do not enter dollar signs or commas in the input boxes. Use the negative sign for values that must be subtracted. Repair and maintenance costs $ Waste Additional contribution margin $ Retain Truck $ Replace Truck
THINGS tion 23 red out of uestion Blue Sky Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $58, purchased nine years ago. It has a book value of $7,000. According to the mechanic who serviced the truck during its the old truck has 3 years of useful life left. Blue Sky Catering wants to purchase a brand-new truck. The new truck costs $62,000 and has a 10-year useful life, a have no salvage value. The new truck is a little larger and would accommodate larger jobs, leading to an additional contribution margin. It would also have a refrigerated section that would reduce waste by $500 each year. As the tr repairs and maintenance costs will also decrease from $2,100 to $1,300 annually. The old truck can be sold for $8,0 Prepare a quantitative analysis to determine whether or not to purchase the new truck. Do not enter dollar signs or commas in the input boxes. Use the negative sign for values that must be subtracted. Repair and maintenance costs $ Waste Additional contribution margin $ Retain Truck $ Replace Truck
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:THINGS
tion 23
red
out of
uestion
Blue Sky Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $58,
purchased nine years ago. It has a book value of $7,000. According to the mechanic who serviced the truck during its
the old truck has 3 years of useful life left.
Blue Sky Catering wants to purchase a brand-new truck. The new truck costs $62,000 and has a 10-year useful life, a
have no salvage value. The new truck is a little larger and would accommodate larger jobs, leading to an additional
contribution margin. It would also have a refrigerated section that would reduce waste by $500 each year. As the tr
repairs and maintenance costs will also decrease from $2,100 to $1,300 annually. The old truck can be sold for $8,0
Prepare a quantitative analysis to determine whether or not to purchase the new truck.
Do not enter dollar signs or commas in the input boxes.
Use the negative sign for values that must be subtracted.
Repair and maintenance costs $
Waste
Additional contribution margin $
Retain Truck
$
Replace Truck
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