Walt Wallace Construction Enterprises is investigating the purchase of a new dump truck. Interest is 9%. The

Question:

Walt Wallace Construction Enterprises is investigating the purchase of a new dump truck. Interest is 9%. The cash flows for two likely models are as follows:

(a) Using present worth analysis, which truck should the firm buy, and why?
(b) Before the construction company can close the deal, the dealer sells out of Model B and cannot get any more. What should the firm do now and why?

Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...