Due to an expanded growth in a city, new waste capacity is needed. A new truck is evaluated to replace the presently owned. The interest rate is 8%.
Present value= $62,000
Annual cost= $12,500
Annual savings= $31,000
Salvage value= $7,200
Life in years= 8
a. B/C = 1.95
b. B/C= 1.45
c. B/C= 0.69
d. B/C= 0.51