Question

The initial cost of a pickup truck is $10782 and will have a salvage value of...

The initial cost of a pickup truck is $10782 and will have a salvage value of $3561 after five years. Maintenance is estimated to be a uniform gradient amount of $171 per year, with zero dollar for first year maintenance. The operation cost is estimated to be $0.38 per mile for 176 miles per month. If the interest rate is 12%, what is the annual equivalent cost (AEC) for the truck?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
E 9-3A. Depreciation Methods A delivery truck costing $20,000 is expected to have a $2,000 salvage...
E 9-3A. Depreciation Methods A delivery truck costing $20,000 is expected to have a $2,000 salvage value at the end of its useful life of four years of 100,000 miles.  Assume that the truck was purchased on January 2.  Calculate the depreciation expense for the second year using each of the following depreciation methods: (a) straight-line, (b) double-declining balance, and (c) units-of-production.  (Assume that the truck was driven 30,000 miles in the second year.) a. Straight-line depreciation = (Acquisition Cost - Salvage value)...
A truck acquired at a cost of $250,000 has an estimated residual value of $12,700, has...
A truck acquired at a cost of $250,000 has an estimated residual value of $12,700, has an estimated useful life of 42,000 miles, and was driven 2,900 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $ (b) The depreciation rate $ per mile (c) The units-of-activity depreciation for the year $
A truck acquired at a cost of $260,000 has an estimated residual value of $12,750, has...
A truck acquired at a cost of $260,000 has an estimated residual value of $12,750, has an estimated useful life of 43,000 miles, and was driven 3,400 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $ (b) The depreciation rate $ per mile (c) The units-of-activity depreciation for the year $
Units-of-activity Depreciation A truck acquired at a cost of $530,000 has an estimated residual value of...
Units-of-activity Depreciation A truck acquired at a cost of $530,000 has an estimated residual value of $28,800, has an estimated useful life of 56,000 miles, and was driven 3,900 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $ (b) The depreciation rate $ per mile (c) The units-of-activity depreciation for the year $
Consider a machine that has an initial cost of $126,000 and an estimated salvage value of...
Consider a machine that has an initial cost of $126,000 and an estimated salvage value of $27,000. After some analysis, we conclude that this machine will have O&M costs of $1,850 per year but based on the faulty nature of this machine we will have to incur major maintenance costs at the end of year 3 and year 6. During year 3 we expect to pay $14,000 and for year 6 we estimate a $16,500. The machine will have a...
I'm looking to determine the equivalent uniform annual cost given the following information: initial investment $1,390,000...
I'm looking to determine the equivalent uniform annual cost given the following information: initial investment $1,390,000 operating costs $45,000/year maintenance costs $15,000/year and increasing by $1,000 each year salvage $69,500 lifetime 12 years MARR 12% Please explain. I'm comparing this information to similar information provided for a different piece of equipment. Thank you!
A truck was acquired on July 1, 2014, at a cost of $172,000. The truck had...
A truck was acquired on July 1, 2014, at a cost of $172,000. The truck had a six-year useful life and an estimated salvage value of $28,000. The straight-line method of depreciation was used. On January 1, 2017, the truck was overhauled at a cost of $25,000, which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $28,000). In computing depreciation for annual adjustment purposes, expense is...
A Tank costs 90,000 $ with a life of 6 years and has no salvage value....
A Tank costs 90,000 $ with a life of 6 years and has no salvage value. It needs an annual maintenance expenditure of 1200 $ for cleaning the tank from inside arrangement. The interest rate is 12%. Calculate the following i) Present worth at zero time of the annual maintenance ii) Future worth of annual maintenance for each year of operation iii) Calculate the depreciation and asset value at the end of 4th year using straight line depreciation method
A pizza company is currently paying its drivers $.30 per mile to drive their own cars...
A pizza company is currently paying its drivers $.30 per mile to drive their own cars on deliveries. The Company is thinking about buying its own delivery vehicle which would cost $25,000 with an estimated 4 year life, a net salvage of $5,000, taxes and insurance at a cost of $1000 per year and operating and maintenance expenses of $.020 per mile. If the interest rate is 8% and the company anticipates an employee will average 25,000 miles per year,...
"A contributing factor to an airplane's duel consumption is the bypass ratio of the engine system....
"A contributing factor to an airplane's duel consumption is the bypass ratio of the engine system. The bypass ratio is the amount of air passing around the engine core relative to the amount of air passing through the core. An airplane manufacturer is designing a new airplane and wants to determine the bypass ratio for the airplane's engine system. The airplane will fly 3,200 hours per year and will average 450 miles per hour. The amount of fuel that the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT