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Cost of converting to electric vehicles

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Reference no: EM132431146

Assignment: Background information: UPS is working with the New York State Energy Research and Development Authority to develop new technology that will allow UPS to convert its diesel-fuelled delivery trucks to electric-fuelled. UPS hopes to have a working model of the converted delivery truck ready sometime in 2020. The plan is to convert 1,500 of the company's delivery vehicles in New York City, representing 66% of its fleet there, by the year 2022. UPS wants to convert its fleet to be all-electric because electric-fuelled trucks eliminate harmful emissions, noise, and dependence on fossil fuels. UPS drivers will use the electric trucks during the day and recharge them overnight. 

Problem:

Question 1: What information would you need to be able to determine if UPS should capitalize or expense the cost of converting the trucks to be all-electric?

Question 2: Do you think UPS will capitalize or expense the cost of converting to electric vehicles? 

Reference no: EM132431146

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