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Help with below calculation Jimbob Co. is considering two alternatives to replace a delivery truck. The following data have been gathered concerning these two alternatives:
Help with below calculation
Jimbob Co. is considering two alternatives to replace a delivery truck. The following data have been gathered concerning these two alternatives: Purchase cost new Major repairs end of year 2 Annual cash operating costs Salvage value at the end of 3 years Truck A $ 50,000 $ 10,000 $ 20,000 $ 15,000 Truck B $ 70,000 8 ,000 $ 18,000 $ 20,000 Jimbob Co. uses a 10% discount rate and the incremental cost approach to capital budgeting analysis. Both trucks are expected to have a useful life of three years. 18) What is the amount of the difference in the net present values of the costs of these alternatives closest to? 18) A) $8,381. B) $12,381. C) $19,567. D) $9,619
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