Find the annual worth of the truck

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Reference no: EM131374877

Tenspeed Trucking (TT) is considering the purchase of a new S65 000 truck. The truck is expected to generate revenues between $12 000 and S22 000 each year, and will have a salvage value of $20 000 at the end of its five-year life. TT pays taxes at the rate of 35%. TT is located in Canada and the CCA rate for trucks is 30% [note to instructors: substitute other appropriate tax information as desired.

TT's after-tax MARR is 12%. Find the annual worth of the truck if the annual revenues are $12 000, and for each $1000 revenue increment up to $22 000. Wha t is the break-even annual revenue? Provide a graph to illustrate the break-even annual revenue.

Reference no: EM131374877

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