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The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4 Runners for company principals. The purchase price for the
The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4 Runners for company principals. The purchase price for the Ford Explorer will be $30,250. Annual maintenance costs for the Explorer are expected to be $575 per year more than that of the 4 Runner. The purchase price for Toyota 4Runners is 37,500 The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4 Runner. (a) What is the incremental ROR between the two vehicles? Provided the firm's MARR is 15% per year, which vehicle should it buy? The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4 Runners for company principals. The purchase price for the Ford Explorer will be $30,250. Annual maintenance costs for the Explorer are expected to be $575 per year more than that of the 4 Runner. The purchase price for Toyota 4Runners is 37,500 The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4 Runner. (a) What is the incremental ROR between the two vehicles? Provided the firm's MARR is 15% per year, which vehicle should it buy
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