Question
Orange Inc. is evaluating the purchase of a new delivery truck for its distribution operations. The company has received two proposals: Truck A costs $50,000
Orange Inc. is evaluating the purchase of a new delivery truck for its distribution operations. The company has received two proposals: Truck A costs $50,000 with annual operating costs of $10,000, while Truck B costs $70,000 with annual operating costs of $8,000. The useful life of both trucks is estimated to be 5 years. Orange Inc. uses a discount rate of 8% for capital budgeting decisions.
Conduct a thorough cost-benefit analysis, including net present value (NPV), internal rate of return (IRR), and sensitivity analysis, to determine the most financially advantageous option for Orange Inc.
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