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A four-year-old truck has a present net realizable value of $6, 500 and is now expected to have a market value of $1, 700 after
A four-year-old truck has a present net realizable value of $6, 500 and is now expected to have a market value of $1, 700 after its remaining three-year life. Its operating disbursements are expected to be $720 per year. An equivalent truck can be leased for $0.35 per mile plus $35 a day for each day the truck is kept. The expected annual utilization is 3,000 miles and 30 days. If the before-tax MARR is 18%, find which alternative is better by comparing before-tax equivalent annual costs a. using only the preceding information; b. using further information that the annual cost of having to operate without a truck is $2,000. a. The before-tax equivalent annual cost for keeping the old truck is (Round to the nearest dollar.)
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