Afour-year-old truck has a present net realizable value of $6,000 and is now expected to have a market value of $1,900 after its remainingthree-year life. Its operating disbursements are expected to be $740 per year.

An equivalent truck can be leased for $0.45 per mile plus $35 a day for each day the truck is kept. The expected annual utilization is 2,500 miles and 30 days. If thebefore-tax MARR is 12%, find which alternative is better by comparingbefore-tax equivalent annual costs

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