C12. A contractor gets revenue of $30,000 every year on the below earthmoving contract. Buy a heavy-duty truck for $35,000, salvage is expected to be
C12. A contractor gets revenue of $30,000 every year on the below earthmoving contract.
Buy a heavy-duty truck for $35,000, salvage is expected to be $3000 at the end of the vehicles 5-year MACRS depreciable life. Maintenance is $1000/year, monthly operating expenses are $1000.
Is it worth signing the contract? Justify. The expected RoR is 9%.
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Authors: William Brueggeman, Jeffrey Fisher
16th Edition
1259919684, 978-1259919688
