A small trucking company is planning to install a GPS system in each of the five trucks the company owns. Each GPS system costs $4600 to install, has a 6-year useful life, and may be salvaged for $300. Total operating cost for all five systems is $1000 for the first year, increasing by $200 per year thereafter. a. How much new annual net income (each year for 6 years) is necessary to recover the initial investment of the five GPS systems at the annual effective interest rate of 9%? (The initial investment includes more than purchase price but not all of the costs given.) b. The company estimates an increased net income of $6000 per year for all five systems. This is total new income, not on top of part a. Now consider if the implementation of the GPS systems is financially viable. You should consider initial investment and maintenance costs. Use the annual effective interest rate of 9% and report the income or loss the company would experience each year.
+1
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A small trucking company is planning to install a GPS system in each of the five trucks the company owns. Each GPS system costs $4600 to ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Home » Business » A small trucking company is planning to install a GPS system in each of the five trucks the company owns. Each GPS system costs $4600 to install, has a 6-year useful life, and may be salvaged for $300.