You are considering purchasing a dump truck.The truck will cost $75,000 and have operating andmaintenance costs that start at $18,000 the first yearand increases by $2,000 per year. Assume that thesalvage value at the end of five years is $22,000 andinterest rate is 12%. What is the equivalent annualcost of owning and operating the truck?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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You are considering purchasing a dump truck.
The truck will cost $75,000 and have operating and
maintenance costs that start at $18,000 the first year
and increases by $2,000 per year. Assume that the
salvage value at the end of five years is $22,000 and
interest rate is 12%. What is the equivalent annual
cost of owning and operating the truck?

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