Flurry Plc.have just purchased a new lorry. They are currently looking at TWO proposals and trying to
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Flurry Plc. have just purchased a new lorry. They are currently looking at TWO proposals and trying to decide which replacement decision would be best for their business, either they will replace their lorry every 4 years or every 5 years. The lorry costs £55,000, with yearly maintenance costs of £3,500. After 4 years the lorry can be sold for £15,000. If sold after 5 years if can be sold for £12,000. The cost of capital if 15%, using Equivalent Annual Annuity (EAA) advise Flurry Plc. on the optimal replacement decision.
Related Book For
Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science
ISBN: 978-0324656633
5th edition
Authors: Cliff T. Ragsdale
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