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Exercise 6-17A Asset replacement-opportunity cost LO 6-5 Benson Freight Company owns a truck that cost $31,000. Currently, the truck's book value is $23,000, and its
Exercise 6-17A Asset replacement-opportunity cost LO 6-5 Benson Freight Company owns a truck that cost $31,000. Currently, the truck's book value is $23,000, and its expected remaining useful life is four years. Benson has the opportunity to purchase for $24,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,600 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 $15,000. Required Calculate the total relevant costs. Should Benson replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Answer is not complete. Keep Old Replace With New Total relevant costs $ 26,400 Should Benson replace or continue the old Replace the old truck truck
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