A truck, costing $25,000 and uninsured, was wrecked the very first day it was used. It can either be disposed for $5,000 cash and replaced with a similar truck costing $27,000, or it can be rebuilt for $20,000 and be brand new as far as operating characteristics and looks are concerned. The preferred decision alternative provides a net cost savings of:

Multiple Choice

• Some amount other than these choices.

• $2,000.

• $5,000.

• $12,000.

• $7,000.