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HaulCo is considering the purchase of a truck. Over its five year life, it will provide net revenues of $17,000 per year at an initial
HaulCo is considering the purchase of a truck. Over its five year life, it will provide net revenues of $17,000 per year at an initial cost of $72,000 and a salvage value of $21,000. HaulCo pays 35% in taxes, the CCA rate for trucks is 30%, and the after tax MARR is 12%. (a) What is the after tax annual cost or worth of this purchase? (5 marks) (b) Should HaulCo pursue this project? Why or why not? (2 marks)
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