Basics of Engineering Economy 1st Edition by Leland Blank,Anthony Tarquin

Exercise 4

Brent owns Beck Trucking.Seven years ago, he purchased a large-capacity dump truck for $15,000 to provide short-haul earth moving services.He sold it today for $5,000.Operating and mainte­nance costs averaged $500 per year.A complete overhaul at the end of year 4 cost an extra $200.( a ) Calculate the annual cost of the truck at 7% per year.( b ) If Brent estimates that Beck cleared at most $0,000 per year added revenue from using the truck, was the purchase economically advantageous?