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Take me to the text Blue Sky Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $
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Blue Sky Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $ when it was purchased nine years ago. It has a book value of $ According to the mechanic who serviced the truck during its last oil change, the old truck has years of useful life left.
Blue Sky Catering wants to purchase a brandnew truck. The new truck costs $ and has a year useful life, after which it will have no salvage value. The new truck is a little larger and would accommodate larger jobs, leading to an additional $ per year in contribution margin. It would also have a refrigerated section that would reduce waste by $ each year. As the truck will be new, repairs and maintenance costs will also decrease from $ to $ annually. The old truck can be sold for $
Prepare a quantitative analysis to determine whether or not to purchase the new truck.
Do not enter dollar signs or commas in the input boxes.
Use the negative sign for values that must be subtracted.
Retain Truck Replace Truck
Repair and maintenance costs $Answer Question
$Answer Question
Waste $Answer Question
$Answer Question
Additional contribution margin $Answer Question
$Answer Question
Cost of new truck $Answer Question
$Answer Question
Sale of old truck $Answer Question
$Answer Question
Total Costs $Answer Question
$Answer Question
Should they retain their old truck or replace it Answer Question
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