Barbs Fine Bakery is considering purchasing a new truck for the business. Barb’s existing truck is a gas guzzler, and with increases in the costs of fuel, she feels she may be able to save a great deal of money if she bought a new hybrid truck. Both the old and new trucks are expected to last five years. The following information relates to both the new and the old truck:

What is the cost or benefit of purchasing the new truck?

a. $40,000 cost

b. $45,000 cost

c. $10,000 benefit

d. $20,000 cost

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Original cost Market value Annual operating costs Old Delivery Truck $45,000 15,000 10,000 New Delivery Truck $60,000 60,000 5,000