# Roadrunner Freight Company owns a truck that cost \$42,000. Currently, the truck’s book value is \$24,000, and its expected remaining useful life is four years. Roadrunner has the opportunity to purchase for \$31,200 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 \$14,400.RequiredCalculate the total relevant costs. Should Roadrunner replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?

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Roadrunner Freight Company owns a truck that cost \$42,000. Currently, the truck’s book value is \$24,000, and its expected remaining useful life is four years. Roadrunner has the opportunity to purchase for \$31,200 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 \$14,400.

Required
Calculate the total relevant costs. Should Roadrunner replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?

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Calculation of rel...

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