The Ryder Truck Rental Company, which owns and rents out 50 trucks, is for sale for $400,000. The owner, Chris Brown, needs your help to build a 5-year economic analysis to assist buyers in evaluating the company. Currently, the market rate for truck rentals is about $12,000 per year per truck. At this base rate, an average of 62% of the trucks will be rented each year. Chris believes that if the rent were lowered by $1,200 per truck per year, utilization would be increased by 7%. He also believes that this relationship would apply to additional reductions in the base rate. For example, at a $7,200 rental rate, 90% of the trucks would be rented. This relationship would apply to increases in the base rate as well (Check in the provided Excel file whether the formula for the utilization makes sense to you). Over the next 5 years, the base rental rate should remain stable. At the end of 5 years, it is assumed that the buyer will resell the business for cash. Chris estimates that the selling price will be three times the gross revenue in the final year. The cost of maintaining the fleet runs about $4,800

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To assist Chris Brown in building a 5year economic analysis for the Ryder Truck Rental Company we ca... View the full answer