A company buys a delivery vehicle today for R60 000 and assumes that the cost of...

 

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A company buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, equal quarterly payments are made into a fund that earns 8% p.a., starting one quarter from now. If the vehicle now owned is sold in part payment for a new vehicle, the quarterly payments (to the nearest cent) made into the sinking fund are equal to R type your answer... A company buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, equal quarterly payments are made into a fund that earns 8% p.a., starting one quarter from now. If the vehicle now owned is sold in part payment for a new vehicle, the quarterly payments (to the nearest cent) made into the sinking fund are equal to R type your answer...

Answer rating: 100% (QA)

To calculate the quarterly payments made into the sinking fund we need to determine the future value ... View the full answer