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% 26. The best truck based on the extemal rate of return (ERR) method is a) Ford; b) GM; c) RAM; d) None of the trucks is acceptable. 27 If the company's truck budget is $550,000, which truck(s) should it purchase assuming that trucks are independent investments? a) RAM only; b) Ford and GM; c) Ford and RAM; d) GM and RAM. 28. If the company prefers to purchase two trucks instead of one truck in 2020 (that is, one truck in the first half of 2020 and the other in the second half of 2020), which truck in Question 27 should it purchase first? a) Ford; b) GM; c) RAM; d) Both trucks should be purchased at the same time. 29. Erika plans to make the following bank deposits in 2020: $500 at the end of March; $600 at the end of June; $700 at the end of September and $800 at the end of December Find Erika's bank balance on December 31, 2020 if the bank's interest rate is 12% compounded annually and Erika's December deposit is included in the bank's end-of-year interest income calculation? a) (500+100(AG, 12%, 4)](A/P,12%, 12) (F/A, 12%, 12) b) 500(P/F, 1%,3)+600(P/F,1%,6)+700(P/F, 1%,9)+800(P/F, 1%, 12)F/P, 12%, 12) c) (500+600+700+800](F/P, 12%,1) d) 500+600+700+800. The Superior Landscaping Company must replace one or two of his aging utility trucks in calendar year 2020. The key parameters of the three trucks under scrutiny are provided below. GM Parameters 1. Initial Cost ($) 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% 26. The best truck based on the extemal rate of return (ERR) method is a) Ford; b) GM; c) RAM; d) None of the trucks is acceptable. 27 If the company's truck budget is $550,000, which truck(s) should it purchase assuming that trucks are independent investments? a) RAM only; b) Ford and GM; c) Ford and RAM; d) GM and RAM. 28. If the company prefers to purchase two trucks instead of one truck in 2020 (that is, one truck in the first half of 2020 and the other in the second half of 2020), which truck in Question 27 should it purchase first? a) Ford; b) GM; c) RAM; d) Both trucks should be purchased at the same time. 29. Erika plans to make the following bank deposits in 2020: $500 at the end of March; $600 at the end of June; $700 at the end of September and $800 at the end of December Find Erika's bank balance on December 31, 2020 if the bank's interest rate is 12% compounded annually and Erika's December deposit is included in the bank's end-of-year interest income calculation? a) (500+100(AG, 12%, 4)](A/P,12%, 12) (F/A, 12%, 12) b) 500(P/F, 1%,3)+600(P/F,1%,6)+700(P/F, 1%,9)+800(P/F, 1%, 12)F/P, 12%, 12) c) (500+600+700+800](F/P, 12%,1) d) 500+600+700+800