Capital Recovery and Annual Worth.
1. Brent owner Beck Trucking. Seven years ago, he bought a large-capacity truck for $ 115,000 to provide short-haul services. He sold it today for $ 45,000. Average operating and maintenance costs incurred at $ 9,500 per year. An additional $ 3,200 surcharge for a complete overhaul is done at the end of year 4.
a) Calculate the truck's annual cost of 7% per year.
b) If Brent estimates that Beck leased at most $ 20,000 a year to increase income from using trucks, Will the truck purchases benefit economically?