Engineering Economy:

A four-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 remaining three-year life. Its operating disbursements are expected to be $740 per year. An equivalent truck can be leased for $0.40 per mile plus $30 a day for each day the truck is kept. The expected annual utilization is 3,000 miles and 30 days. If the before-tax MARR is 15%, find which alternative is better by comparing before-tax equivalent annual costs a. using only the preceding information; b. using further information that the annual cost of having to operate without a truck is $2,250.

The interest and annuity table for discrete compounding when i = 15% per year.

Please do not just add the book solution because, the answer to part a. for the before-tax equivalent annual cost for keeping the old truck, is incorrect.

12 13 14 15 16 17 19 20 Discrete Compounding; 15% Single Payment Uniform Series Compound Sinking Compound Capital Amount Present Amount Present Fund Recovery Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P AP F/P P/F F/A PIA 1.1500 1.1500 0.8696 1.0000 06151 1.3225 1.6257 0.4651 0.7561 2.1500 0.2880 0.6575 3.4725 2.2832 1.5209 4.9934 2.8550 0.2003 1.7490 0.5718 0.1483 3.3522 2.0114 0.4972 6,7424 0.1142 0.4323 8.7537 3.7845 2.3131 11.0668 4.1604 0.3759 2.6600 13.7268 4.4873 0.0729 3.0590 0.3269 0.0596 0.2096 16.7858 4.7716 3.5179 0.2843 4,0456 5.0188 0.0493 0.1993 0.2472 20,3037 0.2149 24.3493 5.2337 0.0411 0.1911 4.6524 5.4206 0.1845 5.3503 0.1869 29,0017 34.3519 5.5831 0.0291 0.1791 6.1528 0.1625 40.5047 5.7245 0.1413 0.0247 0.1747 7,0757 47.5804 5.8474 0.0210 0.1710 8.1371 0.1229 55.7175 0.1069 0.0179 0.1679 9,3576 0.0929 6.0472 0.0154 10.7613 65.0751 0.1654 75.8364 6.1280 0.0132 12.3755 0.0808 88.2118 0.1613 0.0703 6, 1982 0.0113 14.2318 102.4436 6.2593. 0.1598 16, 3665 0.0611