Nancyrsquos notions pays a delivery firm to distribute its, Ask an Expert

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Nancy’s Notions pays a delivery firm to distribute its products in the metro area. Delivery costs are $32,000 per year. Nancy can buy a used truck for $8,000 that will be adequate for the next 5 years. Operating and maintenance costs are estimated to be $22,000 per year. At the end of 5 years, the used truck will have an estimated salvage value of $5,000. Nancy’s MARR is 22%/year.

What is the present worth of this investment? $

Round entry to two decimal places. The tolerance is ±5.

What is the decision rule for judging the attractiveness of investments based on present worth?

Should Nancy buy the truck?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92319674

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