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Question 5.T-Y-S.G: An office supply company has purchased a light duty delivery...

An office supply company has purchased a light duty delivery truck for \$ 15,000. It is anticipated that the purchase of the truck will increase the company’s revenue by \$ 10,000 annually, whereas the associated operating expenses are expected to be \$ 3,000 per year. The truck’s market value is expected to decrease by \$ 2,500 each year it is in service. If the company plans to keep the truck for only 2 years, what is the annual worth of this investment? The MARR =18 \% per year. (5.5)

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\begin{aligned}\mathrm{AW}(18 \%)=&-\$ 15,000(A / P, 18 \%, 2)+\$ 10,000-\$ 3,000 \\&+\$ 10,000(A / F, 18 \%, 2) \\=& \$ 2,006.50>0 .\end{aligned}

A good investment.

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