Walton Freight Company owns a truck that cost $50,000. Currently, the truck's book value is $23,000, and its expected remaining useful life is four years. Walton has the opportunity to purchase for $29,100 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $16,000. Required Calculate the total relevant costs. Should Walton replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?

Keep Old Replace With New

Total relevant costs

Should Walton replace of continue the old truck?