compute the present worth. thank you Robinson Co. is interested in purchasing a...
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compute the present worth. thank you
Robinson Co. is interested in purchasing a new delivery vehicle so it can become a subcontractor with Amazon Logistics. The vehicle would cost $250,000 and generate delivery revenue of $50,000 for each of the next 6 years. If Robinson Co, purchases the vehicle, it will take a loan for $200,000. The terms of the loan stipulate that 2% annual interest would be charged and that the loan would be repaid in 6 equal end of year payments. At the end of the 6 years, the vehicle will have a salvage value of $10,000. The tax rate is 40%. Assuming that the vehicle is depreciated using MACRS (5-year property class) and that Robinson Co.uses an after-tax MARR of 8%, compute the PW and determine whether Robinson Co. should purchase the new business vehicle
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