A construction firm buys and replaces its dump trucks periodically. It is considering the choice between two versions of the same make of truck: (1) the standard version, which costs $50,000 and is replaced every 7 years, or (2) the heavy-duty version, which costs $70,000 and whose replacement frequency is unknown to the firm. If operation and maintenance costs of the two trucks are assumed to be the same, how long must the heavy-duty truck last in order to be equivalent to the standard version? Solve using annual cash flow analysis, and draw the cash flow diagrams and breakeven chart. The firm uses a MARR of 10%
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