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HoracioMo HoracioMo
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A year ago
Bend Manufacturers is considering investing in a new truck that will be used to deliver its custom-made furniture. Ron Shop, Controller of Bend Manufacturers, is considering a truck which will cost $80,000 and which has a useful life of 5 years. The new truck will save $9,600 per year in operating costs which are realized at the end of each year. Ron believes if the new truck is purchased it could be sold for $64,500 at the end of its useful life. Bend's required rate of return is 10%. What is the new truck's net present value?


Type of Cash FlowPeriodsInterest RateFactor
PV of $1510%0.6209
FV of $1510%1.6105
PV ordinary annuity510%3.7908
FV ordinary annuity510%6.1051
PV annuity due510%4.1699


▸ ($8,049)

▸ ($80)

▸ $18,658

▸ ($3,559)
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Managerial Accounting

Managerial Accounting


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jmoline2jmoline2
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A year ago
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