Rembert Freight owns a truck that cost $90,000. Currently, the truck’s book value is $54,000, and its expected remaining useful life is four years. Rembert has the opportunity to purchase for $64,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $8,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $36,000.

Required

Should Rembert replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Explain.