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Show how to get these npv in excel Rocky Transportion runs a large fleet of trucks for a construction business and need to purchase 1
Show how to get these npv in excel
Rocky Transportion runs a large fleet of trucks for a construction business and need to purchase trucks this year. The Hino Trucks cost $ each and has annual operating expenses of $ and an expected life of years. At the end of years it is expected that the trucks can be sold for $ each.
The alternative, a Mercedes truck, costs $ has annual operating costs of $ and has an expected life of years, at the end of which you expect its salvage value to be $
Each truck will be depreciated straightline over its expected life. The firm's total tax rate is and our required rate of return is Which truck should you choose?
EAA Hino $
EAA Mercedes $
Suzie Sizemore owns Sizemore Aviation that operates in the Caribbean and parts of South America. She currently operates a Cessna Caravan, which she purchased five years ago for $ and which was being depreciated straightline over years, at the end of which it would have a zero salvage value. Right now, it has a market value of $
She believes that if she updates to a Pilatus PC turboprop that she can make her trips faster, carry more cargo andor passengers and thus make more money. She has already prepared herself professionally and spent $ to get training and certification on the Pilatus model last year. The downside is that the Pliatus sells for $ and would only be economical to operate for years, at which time it would have an estimated salvage value of $ This plane would be depreciated straightline over years.
Given the new plane's speed and efficiency, she believes that her revenue would increase by $ per year and at the same time her expenses would go down by $ per year. Her marginal tax rate is and her required rate of return is Should she make the change? Show all work and report all relevant numbers.
$
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