Ups freight plans to spend 100 million on new long-haul

Reference no: EM13379201

UPS Freight plans to spend $100 million on new long-haul tractor-trailers. Some of these vehicles will include a new shelving design with adjustable shelves to transport irregularly sized freight that requires special handling during loading and unloading. Though the life is relatively short, the director ants a capitalized cost analysis performed on the two final designs. Compare the alternatives at the MARR of 10% per year.

Design A:Movable Shelves Design B:Adaptable Frames

First cost, $ - 2,500,000 - 1,100,000

AOC, $ per year - 130,000 - 65,000

Annual revenue, $ per year 800,000 625,000

Salvage value, $ 50,000 20,000

Life, years 6 4

Reference no: EM13379201

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