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ABC company has just purchased a life truck that has a useful life of 5 years. The engineer estimates that maintenance costs for the truck
ABC company has just purchased a life truck that has a useful life of 5 years. The engineer estimates that maintenance costs for the truck during the rst year will be $2,000. As the truck ages, maintenance costs are expected to increase at a rate of $300 per year over the remaining life. Assume that the maintenance costs occur at the end of each year. The rm wants to set up a maintenance account that earns 10% interest per year. All future maintenance expenses will be paid out of this account. How much does the rm have to deposit in the account now? 0 $9,640.11 0 $11,500.00 0 $9,920.21 0 $9,127.02
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