A truck was purchased four years ago for $60,000 to move raw materials and finished goods between a production facility and four remote warehouses. This truck (the defender) can be sold at the present time for $42,000 and replaced by a new truck (the challenger) with a purchase price of $73,000. a. Given the MVs and operating and maintenance costs, what is the economic life of the challenger if MARR = 10%? Note: This is a before-tax analysis that does not require any calculations involving the defender. b. Suppose that the defender was set up on a depreciation schedule with a five-year MACRS class life at the time of its purchase (four years ago). The corresponding depreciation rates are 20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%. The tax rate is 25%. The defender can be sold now for $42,000, or a rebuilt engine and transmission can be purchased and installed at a cost of $15,000 (capital investment with three-year depreciable life, straight line, salvage value = 0). If the defender is kept in service, assume that it will have operating and maintenance costs as shown in Part (a) and a MV of $0 at the end of four years. Determine the ATCFs for the defender. Click the icon to view the data for both alternatives. Click the icon to view the interest and annuity table for discrete compounding when MARR = 10% per year. a. The economic life of the challenger is year(s). (Round to the nearest whole number.) More Info Problem 9-26 (algorithmic) A truck was purchased four years ago for $60,000 to move raw materials and finished good $42.000 and replaced by a new truck (the challenger) with a purchase price of $73,000. a. Given the MVs and operating and maintenance costs, what is the economic life of the ch b. Suppose that the defender was set up on a depreciation schedule with a five-year MACI 11.52% and 5.76%. The tax rate is 25%. The defender can be sold now for $42,000, orar depreciable life, straight line, salvage value = 0). If the defender is kept in service, assume ATCFs for the defender, Click the icon to view the data for both alternatives. Click the icon to view the interest and annuity table for discrete compounding when M N i More Info Challenger EOY Market value EOY Defender Market O&M Costs value $28,500 $8,000 19,500 11,500 11,500 13,500 4.500 16,500 1 2 Discrete Compounding; 1= 10% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A Given P Glven F Glven A Glven A Given F F/P P/F FIA PIA A/F 1.1000 0.9091 1.0000 0.9091 1.0000 1.2100 0.8264 2.1000 1.7355 0.4762 1.3310 0.7513 3.3100 2.4869 0.3021 1.4641 0.6830 4.6410 3.1699 0.2155 1.6105 0.6209 6.1051 3.7908 0.1638 1.7716 0.5645 7.7156 4.3553 0.1296 1.9487 0.5132 9.4872 4.8684 0.1054 2.1436 0.4665 11.4359 5.3349 0.0874 2.3579 0.4241 13.5795 5.7590 0.0736 2.5937 0.3855 15.9374 6.1446 0.0627 2.8531 0.3505 18.5312 6.4951 0.0540 3.1384 0.3186 21.3843 6.8137 0.0468 3.4523 0.2897 24.5227 7.1034 0.0408 3.7975 0.2633 27.9750 7.3667 0.0357 4.1772 0.2394 31.7725 7.6061 0.0315 4.5950 0.2176 35.9497 7.8237 0.0278 5.0545 0.1978 40.5447 8.0216 0.0247 5.5599 0.1799 45.5992 8.2014 0.0219 6.1159 0.1635 51.1591 8.3649 0.0195 6.7275 0.1486 57.2750 8.5136 0.0175 Capital Recovery Factor To Find A Glven P A/P 1.1000 0.5762 0.4021 0.3155 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627 0.1540 0.1468 0.1408 0.1357 0.1315 0.1278 0.1247 0.1219 0.1195 0.1175 O&M Costs $5,000 6,400 6,900 9,000 1 2 3 $55,000 42,000 31,500 20,500 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 3 4 4 Print Done Print Done Enter your answer in the answer box and then click Check Answer. A truck was purchased four years ago for $60,000 to move raw materials and finished goods between a production facility and four remote warehouses. This truck (the defender) can be sold at the present time for $42,000 and replaced by a new truck (the challenger) with a purchase price of $73,000. a. Given the MVs and operating and maintenance costs, what is the economic life of the challenger if MARR = 10%? Note: This is a before-tax analysis that does not require any calculations involving the defender. b. Suppose that the defender was set up on a depreciation schedule with a five-year MACRS class life at the time of its purchase (four years ago). The corresponding depreciation rates are 20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%. The tax rate is 25%. The defender can be sold now for $42,000, or a rebuilt engine and transmission can be purchased and installed at a cost of $15,000 (capital investment with three-year depreciable life, straight line, salvage value = 0). If the defender is kept in service, assume that it will have operating and maintenance costs as shown in Part (a) and a MV of $0 at the end of four years. Determine the ATCFs for the defender. Click the icon to view the data for both alternatives. Click the icon to view the interest and annuity table for discrete compounding when MARR = 10% per year. a. The economic life of the challenger is year(s). (Round to the nearest whole number.) More Info Problem 9-26 (algorithmic) A truck was purchased four years ago for $60,000 to move raw materials and finished good $42.000 and replaced by a new truck (the challenger) with a purchase price of $73,000. a. Given the MVs and operating and maintenance costs, what is the economic life of the ch b. Suppose that the defender was set up on a depreciation schedule with a five-year MACI 11.52% and 5.76%. The tax rate is 25%. The defender can be sold now for $42,000, orar depreciable life, straight line, salvage value = 0). If the defender is kept in service, assume ATCFs for the defender, Click the icon to view the data for both alternatives. Click the icon to view the interest and annuity table for discrete compounding when M N i More Info Challenger EOY Market value EOY Defender Market O&M Costs value $28,500 $8,000 19,500 11,500 11,500 13,500 4.500 16,500 1 2 Discrete Compounding; 1= 10% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A Given P Glven F Glven A Glven A Given F F/P P/F FIA PIA A/F 1.1000 0.9091 1.0000 0.9091 1.0000 1.2100 0.8264 2.1000 1.7355 0.4762 1.3310 0.7513 3.3100 2.4869 0.3021 1.4641 0.6830 4.6410 3.1699 0.2155 1.6105 0.6209 6.1051 3.7908 0.1638 1.7716 0.5645 7.7156 4.3553 0.1296 1.9487 0.5132 9.4872 4.8684 0.1054 2.1436 0.4665 11.4359 5.3349 0.0874 2.3579 0.4241 13.5795 5.7590 0.0736 2.5937 0.3855 15.9374 6.1446 0.0627 2.8531 0.3505 18.5312 6.4951 0.0540 3.1384 0.3186 21.3843 6.8137 0.0468 3.4523 0.2897 24.5227 7.1034 0.0408 3.7975 0.2633 27.9750 7.3667 0.0357 4.1772 0.2394 31.7725 7.6061 0.0315 4.5950 0.2176 35.9497 7.8237 0.0278 5.0545 0.1978 40.5447 8.0216 0.0247 5.5599 0.1799 45.5992 8.2014 0.0219 6.1159 0.1635 51.1591 8.3649 0.0195 6.7275 0.1486 57.2750 8.5136 0.0175 Capital Recovery Factor To Find A Glven P A/P 1.1000 0.5762 0.4021 0.3155 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627 0.1540 0.1468 0.1408 0.1357 0.1315 0.1278 0.1247 0.1219 0.1195 0.1175 O&M Costs $5,000 6,400 6,900 9,000 1 2 3 $55,000 42,000 31,500 20,500 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 3 4 4 Print Done Print Done Enter your answer in the answer box and then click Check