$($Click the icon to view the Future Value of an Annuity Due table.$)$

$)($Click the icon to view the Present Value of an Annuity Due table.$)$

Requirement

intermediary currency calculations and your final answer to the nearest cent, $X$.$XX$.)$

Begin by computing the present value of Truck A$.$

The present value of the first alternative $($Truck A$)$ is

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Truck A: Merrill can purchase Truck A for $$40,000.$ The truck has a useful life of

$6$ years and will require annual maintenance costs of $$1,200$ each year.

Merrill expects to sell the truck for $$9,000$ after $6$ years.

Truck B: Merrill can purchase Truck B for $$35,000.$ This truck also has a useful

life of $6$ years but will have no scrap value. It will require maintenance

costs every two years as follows:

Year $2$: $$2,400$

Year $4$: $$4,800$

Year $6$: $$6,800$