Determine which model should be chosen

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Reference no: EM132160970

Question: A small manufacturing company is evaluating trucks for delivering their products. Truck A has a first cost of $22,000, its operating cost will be $5500 per year, and its salvage after 3 years will be $7000. Truck B has a first cost of $27,000, an operating cost of $5200, and a resale value of $12,000 after 4 years. At an interest rate of 15% per year, which model should be chosen if an annual worth analysis is performed?

Reference no: EM132160970

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