Answered step by step
Verified Expert Solution
Question
1 Approved Answer
can you please solve this question for me? thank you A public water utility is replacing its service trucks with more fuel-efficient vehicles. Two types
can you please solve this question for me? thank you
A public water utility is replacing its service trucks with more fuel-efficient vehicles. Two types of trucks are under consideration: Type 1 uses "start-stop" technology that turns the engine off when the vehicle comes to a halt in traffic or at a stop light. These trucks will get 22 miles per gallon of gasoline and will cost $35,000 to buy. At the end of the truck's 5-year service life, it is expected to sell for $10,000. Type 2 trucks use a system called Variable Cylinder Management wherein the engine operates on fewer cylinders when the vehicle is cruising under light load conditions. These trucks will cost $41,500 and will get 25 miles per gallon. Its salvage value is expected to be $12,000 after 5 years. The trucks are driven an average of 21,000 miles per year and the wholesale price of gasoline is $4.00 per gallon. With an interest rate of 3% per year, what is the equivalent annual worth of each truck? Truck 1 = $7.454; Truck 2 = $8,234 Truck 1 = $7.454: Truck 2 = $9.234 Truck 1 = $9.454: Truck 2 = $7.234 Truck 1 = $8.588; Truck 2 = $9.220 Truck 1 = $9.577: Truck 2 = $10,161Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started