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Find Using tables A consulting engineering firm's CFO wants to purchase either Ford Explorers or Toyota 4Runners for company principals. The two models under consideration
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A consulting engineering firm's CFO wants to purchase either Ford Explorers or Toyota 4Runners for company principals. The two models under consideration cost $30,900 for the Ford and $36,400 for the Toyota. When considering life-cycle costs, the AOC of the Explorer is expected to be $600 per year more than that of the 4Runner. The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm's MARR is 18% per year, which vehicle should it buyStep by Step Solution
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