A company is considering buying a truck which has an initial cost of $100,000, an expected...
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A company is considering buying a truck which has an initial cost of $100,000, an expected life of 10 years, and a salvage value of $10,000. Annual operating costs for the first 5 years are estimated to be $5,000 per year and will be $8000 per year for the second 5 years. If the interest rate is 8% per year: 1. Draw the Cash Flow Diagram. 2. What is the PRESENT value of this investment? A company is considering buying a truck which has an initial cost of $100,000, an expected life of 10 years, and a salvage value of $10,000. Annual operating costs for the first 5 years are estimated to be $5,000 per year and will be $8000 per year for the second 5 years. If the interest rate is 8% per year: 1. Draw the Cash Flow Diagram. 2. What is the PRESENT value of this investment?
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To calculate the present value of this investment we need to determine the annual cash flows and dis... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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