Question
7. In a typical year, J. B. Hunt Transport Services Inc. (JBHT) purchases hundreds of new over-the-road tractors. A certain type of tractor has a
7. In a typical year, J. B. Hunt Transport Services Inc. (JBHT) purchases hundreds of new over-the-road tractors. A certain type of tractor has a retail price of $100,000. End-of-year book values, salvage values, and annual operations and maintenance (O&M) costs over its useful life are provided in the following table.
| EOY | |Book Value| | Salvage Value| | O&M Costs| |
| 1 | $80,000 | $53,000 | $15,000 |
| 2 | $48,000 | $39,000 | $21,000 |
| 3 | $28,800 | $28,000 | $27,000 |
| 4 | $17,280 | $18,000 | $34,000 |
| 5 | $5,760 | $14,000 | $42,000 |
| 6 | 0 | $6,000 | $49,000 |
Determine the economic life of this type of tractor given that the MARR is 15% and the marginal tax rate is 40%.
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ISO 9000 Family Of Standards With Extracts From ISO 9001 Audit Trail
Authors: David John Seear
1st Edition
1477226400, 978-1477226407
