Limited capital to serve independent gas station operations

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Reference no: EM131589976

The Southwest Trucking Company (STO) is a medium-sized freight line started with very limited capital to serve the independent gas station operations in the arid Southwest. All of its trucks are identical. STC has been contracting its truck overhaul work to ABC Automotive for $6,000 per truck per year. STC estimate that, by building a $250,000 maintenance facility with a life of 7 years and a residual (market) value of $50.000 at the end of its life, they could handle their own overhaul at the cost of only $3, 900 per tuck per year What is the minimum number of trucks that they must operate to make it economically feasible to build this facility? The MARR is 8% per year. (Enter your answer as a number without the dollar exist sign.)

Reference no: EM131589976

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