Homework Answers
incremental initial cost (truck B - truck A) = 34000 - 28000 = 6000
incremental salvage value (truck B - truck A) = 26000 - 15000 = 11000
Let incremental IRR be i%, then
6000 = 11000 / (1+i)^4
1+i = (11000 / 6000)^(1/4) = 1.1636178
I = 1.1636178 - 1 = 0.1636178 ~ 16.4 % (round to one decimal place)
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