Perform the required analysis of truck-bed sizes in Problem 8.33 using a spreadsheet. Data from problem 8.33
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Data from problem 8.33
A recent graduate who wants to start an excavation/ earth-moving business is trying to determine which size of used dump truck to buy. He knows that as the bed size increases, the net income increases, but he is uncertain whether the incremental expenditure required for the larger trucks is justified. The cash flows associated with each size truck are estimated below. The contractor has established a MARR of 18% per year, and all trucks are expected to have a remaining economic life of 5 years.
(a) Determine which size truck he should purchase.
(b) If two trucks are to be purchased, what should be the size of the second truck?
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...
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a Spreadsheet analysis results in selection of 25 m 3 truck bed size b Purchase truck that was elimi...View the full answer
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