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You are an executive at Republic Services, Inc. ( RSG ) and have been approached by the electric vehicle maker, Nikola Corp. ( NKLA )
You are an executive at Republic Services, Inc. RSG and have been approached by the electric vehicle maker, Nikola Corp. NKLA NKLA has offered to sell you a fleet of their electric garbage trucks for $ each. These trucks are more expensive than the current gasolinepowered trucks, which sell for $ each. However, you are expected to generate significant cost savings with the electric trucks due to lower maintenance and fuel ie electric vs gas costs. However, the electric trucks are expected to have a shorter useful life years due to battery replacement costs when compared to the gas powered trucks years As a result, assume that annual cash flows generated per truck from the use of the electric garbage truck will be $ and $ when using the gas truck. Calculate the NPV and EAC of each investment option using cash flows assuming a purchase of one of each truck. Assume a cost of capital. Write an IF statement that will provide you with your decision as to which truck type to use. In the space below, discuss your decision and the method you used to determine which truck type to purchase.
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