More expensive truck is worth the additional cost

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A fleet manager must choose between two trucks to purchase for a company's fleet. The company will keep either truck for 4 years. Truck A costs $29,000 and has a market value of $16,000 after 4 years. Truck B costs $33,000 and has a market value of $25,000 after 4 years. Determine the incremental rate of return that should be used to determine whether the more expensive truck is worth the additional cost.

Reference no: EM13840144

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