Problem

The Division of Sanitation of a city buys a new solid waste collection vehicle for $100,00...

The Division of Sanitation of a city buys a new solid waste collection vehicle for $100,000 and plans to keep it seven years before selling it for $20,000. Vehicle repair costs are expected to be $400 in the first year and grow 20% per year thereafter. Cost savings from the new vehicle follow an arithmetic gradient series with G = $500. Draw the cash flow diagram from the viewpoint of the Division of Sanitation.

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