FoxLin is a trucking company which employs 12 trucks to run its business. Of these 12...
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FoxLin is a trucking company which employs 12 trucks to run its business. Of these 12 trucks, three are reaching their productive life and the company is considering replacing them with new ones. The total cash flows for the three trucks are as follows: Net Year cash flow 0 1 2 3 Residual value 212000 170000 60000 60000 140000 45000 90000 If the required rate of return is 6% when should the trucks be replaced? FoxLin is a trucking company which employs 12 trucks to run its business. Of these 12 trucks, three are reaching their productive life and the company is considering replacing them with new ones. The total cash flows for the three trucks are as follows: Net Year cash flow 0 1 2 3 Residual value 212000 170000 60000 60000 140000 45000 90000 If the required rate of return is 6% when should the trucks be replaced?
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Answer rating: 100% (QA)
To determine when the trucks should be replaced we can use the Net Present Value NPV method NPV calc... View the full answer
Related Book For
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto
Posted Date:
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