A scrap metal dealer purchased a truck for $45,000, and the maintenance cost for the truck was $890 per month, with average revenues of $5,000 per month. The truck was sold in two years for $12,000.The rate of return equation in PW terms is: Select one: a. 45,000-890(P/F,1%,24)+5,000(P/A,1%,24)+12K(P/F, 1%,24) = 0 b. -45,000+4,110(P/A,1%,24)+12,000(P/F,1%,24) = 0 c. -45,000+4,110(P/A,1%,24)-12,000(P/A,1%,24) = 0 %3D d. -45,000+5,000(P/A,1%,24)+12,000(P/F,1%,24) = 0
A scrap metal dealer purchased a truck for $45,000, and the maintenance cost for the truck was $890 per month, with average revenues of $5,000 per month. The truck was sold in two years for $12,000.The rate of return equation in PW terms is: Select one: a. 45,000-890(P/F,1%,24)+5,000(P/A,1%,24)+12K(P/F, 1%,24) = 0 b. -45,000+4,110(P/A,1%,24)+12,000(P/F,1%,24) = 0 c. -45,000+4,110(P/A,1%,24)-12,000(P/A,1%,24) = 0 %3D d. -45,000+5,000(P/A,1%,24)+12,000(P/F,1%,24) = 0
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...
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