A transportation company has bought a truck for $35,000.

Maintenance costs of the truck are $2000 per year, increasing by $500 each year.

Assuming a declining balance depreciation of 10% annually and 5% annual interest rate, use the provided formula sheet to determine the EAC (Equivalent annual cost) for the next 3 years.

Depreciation Rate: Linear Interpolation: Sinking Fund Factor (A/F,i,N) = (1 +-1 Uniform Series Compound After-tax IRR: After-tax MARR: Effective Interest Rate: Modified Benefit-Cost Ratio: Amount Factor PW(capital costs) Benefit-Cost Ratio: PW(benefits) PWcosts) Book Value, Declining-Balance: Payback Period: Capital Recovery Factor Effective Interest Rate for Continuous Compounding: First cost Payback period= Annual savings APiN) Real Dollars: e Series Present Worth Factor Expected Value of the Discrete Random Variable: Book Value, Straight-Line: Arithmetic Gradient to Annuity Conversion Factor Financial Ratios: Capital Tax Factor: Quick assets Current liabilities dl i/2 Acid test ratio Real MARR: Geometric Gradient Series to Present Worth Conversion Factor Current assets Current liabilities Capital Salvage Factor: e Current ratio- MARR +MARR td CSF-1- G+d) . Equity ratio =- Total assets Total Real Interest Rate: Capitalized Value: Sales Inventory turnover Real IRR: Capital Recovery Formula: Return on- Profits after taxes Total assets A = (P-S)(A/P,i,N ) + Si IRRR total assets Compound Interest: Depreciation Amount, Straight Simple Interest Amount: Growth-Adjusted Interest Rate: Compound Interest Factors: Depreciation Amount, Declining Internal Rate of Return: Balance: Compound Amount Factor R-D . Present Worth Factor A - PIA/P,i, N] P = A [P/A, i, N] P = A[P/A, g,i,N] Crash Cost per Unit Time Crash Cost-Normal Cost Normal Time Crash Time