=+2 A light truck, costing $101000 and uninsured, is wrecked on its first day in use. It
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=+2 A light truck, costing $101000 and uninsured, is wrecked on its first day in use. It can be either:
(a) disposed of for $17500 cash and replaced with a similar light truck costing $103500 or
(b) rebuilt for $89500 and thus be brand new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations.
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Authors: Monte Wynder, Madhav V. Rajan, Srikant M. Datar, Charles T. Horngren, William Maguire, Rebecca Tan
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