The Superior Landscaping Company must replace one or two of his aging utility trucks in calendar year 2020. The key parameters of the three trucks under scrutiny are provided below. GM Parameters 1. Initial Cost ($) FORD 235,000 RAM 275,000 265,000 2. Revenues 220,000 at 1 increasing by 2% annually thereafter. 240,000 at EOY1 increasing by $3,000 annually thereafter. 254,000 at EOY1 increasing by 1.0% annually thereafter. ($) 3. Operating costs 110,000 at EOY1 to EOY3. 145,000 at EOY1 decreasing by $1,000 annually thereafter 183,000 at EOY1 decreasing by 1% annually thereafter. ($) 6,000 17,000 12,000 4. End-of-life salvage value ($) 5. Useful life (years) All parameter values are fictitious. EOY = End-of-year Industry Standard = 3 years MARR = 10% 19. GM's Intemal Rate of Return (IRR) (first decimal; no rounding) is a) 15.8%;b) 17.6%; c) 19.2%; d) 20.4%. 20. The incremental Internal Rate of Return (AIRR) between the Ford and RAM trucks (first decimal; no rounding) is a) Less than 1%;b) 3.1%; c) 4.3%; d) 6.8%. The best truck based on the IRR method is a) Ford; b) GM; c) RAM; d) None of the trucks is acceptable. Ford's External Rate of Return (ERR) (first decimal; no rounding) is a) 10.4%;b) 12.9%; c) 16.9%; d) 17.7%. RAM's External Rate of Return (ERR) (first decimal; no rounding) is a) 14,9%; b) 19.1%; c) 20.9%; d) 21.1%. The incremental Extemal Rate of Return (AERR) between the Ford and GM trucks (first decimal; no rounding) is a) 7.7%; b) 8.7%; c) 9.8%; d) 10.4% 25. The incremental Extemal Rate of Return (AERR) between the GM and RAM trucks (first decimal; no rounding) is a) 9.6%; b) 9.9%; c) 10.4%; d) 10.7%. The Superior Landscaping Company must replace one or two of his aging utility trucks in calendar year 2020. The key parameters of the three trucks under scrutiny are provided below. GM Parameters 1. Initial Cost ($) FORD 235,000 RAM 275,000 265,000 2. Revenues 220,000 at 1 increasing by 2% annually thereafter. 240,000 at EOY1 increasing by $3,000 annually thereafter. 254,000 at EOY1 increasing by 1.0% annually thereafter. ($) 3. Operating costs 110,000 at EOY1 to EOY3. 145,000 at EOY1 decreasing by $1,000 annually thereafter 183,000 at EOY1 decreasing by 1% annually thereafter. ($) 6,000 17,000 12,000 4. End-of-life salvage value ($) 5. Useful life (years) All parameter values are fictitious. EOY = End-of-year Industry Standard = 3 years MARR = 10% 19. GM's Intemal Rate of Return (IRR) (first decimal; no rounding) is a) 15.8%;b) 17.6%; c) 19.2%; d) 20.4%. 20. The incremental Internal Rate of Return (AIRR) between the Ford and RAM trucks (first decimal; no rounding) is a) Less than 1%;b) 3.1%; c) 4.3%; d) 6.8%. The best truck based on the IRR method is a) Ford; b) GM; c) RAM; d) None of the trucks is acceptable. Ford's External Rate of Return (ERR) (first decimal; no rounding) is a) 10.4%;b) 12.9%; c) 16.9%; d) 17.7%. RAM's External Rate of Return (ERR) (first decimal; no rounding) is a) 14,9%; b) 19.1%; c) 20.9%; d) 21.1%. The incremental Extemal Rate of Return (AERR) between the Ford and GM trucks (first decimal; no rounding) is a) 7.7%; b) 8.7%; c) 9.8%; d) 10.4% 25. The incremental Extemal Rate of Return (AERR) between the GM and RAM trucks (first decimal; no rounding) is a) 9.6%; b) 9.9%; c) 10.4%; d) 10.7%