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A man was awarded four years contract for trucking services. He wishes to purchase a vehicle worth 1,000,000.00. The vehicle is to be used for
A man was awarded four years contract for trucking services. He wishes to purchase a vehicle worth 1,000,000.00. The vehicle is to be used for 20,000 km per year. The estimated fuel consumption per year is 125,000. The dealer of the vehicle agrees to handle all the maintenance cost for four years at an additional cost of 200,000.00. The money is worth 15% per year. Salvage value of the vehicle after four years is 300,000.00 a. What is the annual cost of the vehicle not including the maintenance cost? b. What is the total annual cost of the vehicle? c. What is the total annual cost of maintenance alone
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