Question: This is a two part question, please answer by hand Your company is looking at purchasing a dump truck at a cost of $75,000. The
This is a two part question, please answer by hand
- Your company is looking at purchasing a dump truck at a cost of $75,000. The truck would have a useful life of five years. At the end of the fifth year the salvage value is estimated to be $15,000. The dump truck could be billed out at $55.00 per hour and costs $18.00 per hour to operate. The operator costs $17.00 per hour. Using 1,000 billable hours per year determine the net present value for the purchase of the dump truck using a MARR of 18%. Should your company purchase the dump truck?
- Determine the rate of return for Problem 1. Should your company purchase the dump truck?
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