A construction company considers renewing its truck fleet. The model that the company considers cost $70,000 and has a useful life of nine years. The operating cost of the truck is $0.05/mile+$3,000 in the initial year, which is expected to increase by 3% every year in the following years. The salvage value at the end of nine years of service is $10,000. Each truck is planned to be driven 10,000 miles every year and the company's MARR is 14%. Determine the equivalent annual cost of owning and operating the model under consideration.

A) $3,852

B) $18,003

C) $17,382

D) Answers A, B and C are not correct

Answer rating: 100% (QA)

Option c is correct Cost of truck fleet 70000 Operating cost 3... View the full answer