Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![An industrial firefighting truck costs $100,000. Savings in insurance premiums and uninsured
losses from the acquisition and operation of this equipment is estimated at $60,000/yr. Salvage
value of the apparatus after 5 yrs. is expected to be $20,000. A full-time driver during operating
hours will accrue an added cost of $10,000/yr. What would the rate of return be on this investment?
@ 40% present worth
@ 50% present worth](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6dac23ee-f5ed-4644-9723-da15e467c512%2Fe710c216-43e2-4d12-a9c9-e2e83c0c24e1%2F8bmymsb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An industrial firefighting truck costs $100,000. Savings in insurance premiums and uninsured
losses from the acquisition and operation of this equipment is estimated at $60,000/yr. Salvage
value of the apparatus after 5 yrs. is expected to be $20,000. A full-time driver during operating
hours will accrue an added cost of $10,000/yr. What would the rate of return be on this investment?
@ 40% present worth
@ 50% present worth
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