Due to expanded growth in a certain portion of the city

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Reference no: EM13838551

Due to expanded growth in a certain portion of the city, a new waste truck capacity is needed. An additional truck can be purchased now to replace the presently owned assets. The city uses a 5% interest rate for project evaluation. It is economically viable to buy the new waste truck?

New model

Present value $72,000

Annual Cost 12,500

Annual Savings 31,000

Salvage value 7,200

Life in years 10

a) PW= -326,256.87

b) PW= 70, 851.45

c) PW= $75,271.53

d) PW= 191,097.03

Reference no: EM13838551

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