Consider the cash flows for the purchase of a new tractor in Table 5.23. Assuming that the
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Consider the cash flows for the purchase of a new tractor in Table 5.23. Assuming that the new tractor costs $150,000, is it better to trade the tractor in year 22 or year 23?
Table 5.23
Transcribed Image Text:
Repair expense Salvage value -2345678 1 1,914 142,684 1,958 135,726 2,006 129,106 2,059 122,810 2,118 116,820 2,183 111,123 2,255 105,703 9 88 2,335 100,548 2,422 95,644 10 2,519 90,980 11 2,627 86,542 12 2,745 82,322 13 2,876 78,307 14 3,021 74,488 15 3,181 70,855 16 3,357 67,399 17 3,553 64,112 18 3,769 60,985 19 4,007 58,011 20 4,271 55,182 21 4,562 52,491 22 4,884 49,931 23 5,240 47,496
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