A bakery is thinking of purchasing a small delivery truck that has a first cost of $18,000 and is to be kept in service for 6 years, at which time the salvage value is expected to be $2500. Maintenance and operating costs are estimated at $2500 the first year and will increase at a rate of $200 per year. Determine the present worth of this vehicle, using an interest rate of 12 percent.

Answer rating: 100% (QA)

Year Capital Costs Maintenance Additional revenue salvage 000 18000 100 4000 100... View the full answer