Assuming costs and benefits are incurred at end of year

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Reference no: EM131323244

A city has learned that by buying larger garbage trucks, it could reduce labor costs for garbage removal. Note: All the dollar amounts below are in this year's dollars (constant dollars).

Cost of trucks today is $400,000.

Annual savings in this year's constant dollars is $90,000.

Trucks will last for 4 years and then will be sold for $100,000.

Discount rate is 3%

Assuming the costs and benefits are incurred at the end of the year, should the city buy the trucks?

Reference no: EM131323244

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