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15. Use the Following Information to Answer the Questions Below Our Business is making a Decision Today for the Next 5 years, to Either Keep

15. Use the Following Information to Answer the Questions Below Our Business is making a Decision Today for the Next 5 years, to Either Keep our OLD Truck or to Purchase a NEW Truck. Our Business has the Following Information to Consider in making the Decision.

OLD TRUCK Costs and Benefits

The Cost of the Old Truck was $100,000 and will last for another 5 Years

Maintenance on the Old Truck is $11,000 per year

Gas to Run the Old Truck is $12,000 per Year

The Old Driver is paid $35,000 per Year

The Old Truck Could be sold today for $35,000

I can sell the Old Truck in 5 years for $10,000

The Old Truck Insurance Costs are $6,000 per Year

NEW TRUCK Costs and Benefits

The Cost of the New Truck would be $200,000 and will last for 5 years.

The new Truck can be sold in 5 years for $55,000

The Maintenance of the New Truck would be Zero for the First 3 years and then $7,000 per year after

The Gas Cost of the New Truck is $9,000 per year The New Driver is paid $30,000 per year

New Truck Insurance Costs are $5,000 per Year

1. Compute the total NET relevant (cost) or benefit to KEEP the old truck -

2. Compute the total NET relevant (cost) or benefit to BUY the new truck -

3. Compute the dollar benefit to your decision -

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