Question

Spring 2019 ck dozer cost $235,000 to purchase. FOG and minor $235 nhr A major engine repair costing CET 470 infrastructure, Heavy Highway aan n. 58) A track 2. Infrastructure, Heavy Highway and Equipment Homework 1 Equipment Economics the Interest Table to calculate values. Show your calculations and procedures Instruction: Use a cash flow diagram. Otherwise, the deduction will be applied. new truck for $125,000 and plans to use the truck for 6 years. tractor has purchased a After 6 years of use, the estimated salvage value for the truck will be $30,000. What is 1. A con the contractor's annual cost (annual uniform series) for the truck at an interest rate of 10%? (20 Points)

Answer 1

Cost of truck = $125,000

Salvage value = $30,000

Interest rate = 10%

Time period = 6 years

Calculate the annual cost -

Annual cost = Cost of truck (A/P, i, n) - Salvage value(A/F, i, n)

Annual cost = $125,000(A/P, 10%, 6) - $30,000(A/F, 10%, 6)

Annual cost = ($125,000 * 0.22961) + ($30,000 * 0.12961)

Annual cost = $28,701.25 - $3,888.30

Annual cost = $24,812.95

The annual cost is $24,812.95

Following is the required cash flow diagram -

S S30,000 i-10% 3 A S24,812.95 P S125,000