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How do I determine which purchase to make? If the companys truck purchase budget is $1,500,000, which truck(s) should it purchase assuming that trucks are
How do I determine which purchase to make?
If the companys truck purchase budget is $1,500,000, which truck(s) should it purchase assuming that trucks are independent investments? a) Gamma only; b) Alpha and Beta; c) Alpha and Gamma; d) Beta and Gamma.
A company is considering the purchase of a new truck for its expanding landscaping business. The key parameters of the three trucks under scrutiny (Alpha, Beta and Gamma) are provided below Computer Parameters Alpha Beta Gamma Initia Cost 5! -3000 071 450,000001 430.00 0 20 2%annually | 2,000 annually 600,000 800,000 300,000 at EOY1 450,000 at EOY1 430,000 at EOY1 increasing by 3% | decreasing by increasing by 2. Revenues (S) annually thereafter. thereafter 280,000 at EOY1 1,000 annually thereafter 130,000 at EOY1 255,000 Eincreasing by increasing by 5,000 annually thereafter. 3. Operating Costs increasing by 2% annually thereafter thereafter 4. End-of-life salvage 15,000 5 10,000 5,000 10 value (S) 5. Useful life (years) 10 Industry Standard = 4 years . MARR= 10%Step by Step Solution
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