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A local appliance repair company is considering the purchase of a service vehicle for its fleet. A Ford Transfer which is a traditional gasoline
A local appliance repair company is considering the purchase of a service vehicle for its fleet. A Ford Transfer which is a traditional gasoline powered vehicle will cost $35,000 and will have operating profits of $20,000 for five years. After five years the vehicle will have a $5,000 trade in value. The second vehicle is a Tesla Model M, is an electric powered vehicle which will cost $65,000, but due to the lower operating costs, will have operating profits of $27,000 for five years. After five years the trade in value is estimated to be $12,000. The cost of capital is 8%. Determine the NPV for each model and the current economic advantage in dollars of your recommended choice.
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