Question
#6 ( 5 points) A BU graduate student wants to buy a car for $36,000 to start a pizza delivery business. The car has projected
#6 ( 5 points) A BU graduate student wants to buy a car for $36,000 to start a pizza delivery business. The car has projected life of 12 years, and a salvage value for the car of $5000 at the end of 12 years. The car will have annual operating costs of $5000 a year,
Assume that THERE ARE NO TAXES..
The opportunity cost of capital is 10%. What is the after-tax EAC (equivalent annual cost) of the car to the business ?
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
