Question
A contractor can buy truck for B3.5 M each or rent them for B4,000 per truck per day. The truck has a salvage value of
A contractor can buy truck for B3.5 M each or rent them for B4,000 per truck per day. The truck has a salvage value of B500,000 at the end of its useful life of 5 years. The annual maintenance cost is B20, 000 per truck. Using annual cost method and 14% interest rate, determine the number of days per year that each truck must be use to warrant its purchase. Use sinking method of depreciation.
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Operations Management
Authors: William J Stevenson
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