The owner of a construction company has requested that her Construction Manager complete an analysis to determine if the companys existing fleet of dump The current fleettrucks should be replaced. of 7 dump trucks cost $80,000 and are 4 years old. The annual maintenance and operating c ost is $25,000 per truck for the first year and increases by $3000 each year. The revenue for each truck is $90,000 for the first year and decreases by $2000 each year thereafter. The proposed replacement trucks cost $100,000 each. The annual maintenanc e and operation cost is expected to be $15,000 the first year and will increase by $1000 per year thereafter. The revenue for each truck is expected to be $80,000 for the first year and will decrease by $2000 each year after. Assume that the company uses straightline depreciation. For the current trucks, assume a lifespan of 7 years and a salvage value of $2 0,000. For the proposed trucks, assume a lifespan of 7 years and a salvage value of $40,000. Assume that the intention is to maximize profit. Clearly state you decision after completing the replacement analysis using the following tables. Depreciation Cost per Year = (Purchase Price Salvage Value) / Life 4

Assume that the interten is to "maximise proft". Clearly tsate you decilion atter complating the replacement analyub using the tollawing tabled. Depreciation Coat per Year = (Purcheie Frice - Salvage Value) f Life