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The 2008 model truck which is used in a seismic exploration survey is quite functional, but it only averages 20 miles per gallon (mpg). The
The 2008 model truck which is used in a seismic exploration survey is quite functional, but it only averages 20 miles per gallon (mpg). The exploration company have found a somewhat newer truck that averages 26 mpg. The company can sell the current truck for $28000 and purchase the newer vehicle for $40,000. Assuming the cost of gasoline to be $4.00 per gallon, how many miles per year must the truck be driven if the company wants to recover its investment in three years? The interest rate is 6% and the salvage value for either vehicle after three years is zero. Both trucks have identical maintenance costs
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