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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago Edited: 8 years ago, duddy
(Present value tables are required.) The Speedy-Delivery Company has two options for its delivery truck. The first option is to purchase a new truck for $15,000. The new truck will have a useful life of 5 years and a residual value of $2,000. Operating costs for the new truck will be $200. The second option is to overhaul its existing truck. The cost of the overhaul will be $8,000. The overhauled truck will have a useful life of 5 years and a residual value of $0. Operating costs for the overhauled truck will be $600. Using Speedy's discount rate of 5%, which option is better and by what amount?
A) Better to purchase new by $3,700
B) Better to overhaul by $3,700
C) Better to overhaul by $5,144
D) Better to purchase new by $5,144
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Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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8 years ago
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bernie2981 Author
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#2
8 years ago
Answers my question perfectly.
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#3
3 years ago
thank you
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