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A trucking company is considering buying another truck because of a purchasing opportunity.The overstock price is $154,000 cash, payable on delivery.It is envisaged that the
A trucking company is considering buying another truck because of a purchasing opportunity.The overstock price is $154,000 cash, payable on delivery.It is envisaged that the truck would produce net cash flows per year of $40,000 for 5 years (assumed received at the end of each year), at which time the truck can be sold for an estimated salvage value of $35,000.Should the company purchase the truck if the discount rate for evaluating capital expenditures is a) 15%?b)10%?
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