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Brewton Freight Company owns a truck that cost $33,000. Currently, the truck's book value is $23,000, and its expected remaining useful life is four years.
Brewton Freight Company owns a truck that cost $33,000. Currently, the truck's book value is $23,000, and its expected remaining useful life is four years. Brewton has the opportunity to purchase for $22,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6, 800 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $16,000. Calculate the total relevant costs. Should Brewton replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Continue to use the old truck Replace the old truck
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