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Exercise 6-17A (Algo) Asset replacement-opportunity cost LO 6-5 Rooney Freight Company owns a truck that cost $33,000. Currently, the truck's book value is $24,000, and
Exercise 6-17A (Algo) Asset replacement-opportunity cost LO 6-5 Rooney Freight Company owns a truck that cost $33,000. Currently, the truck's book value is $24,000, and its expected remaining useful life is five years. Rooney 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 $6,300 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 $17,000. Required Calculate the total relevant costs. Should Rooney replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out
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