Investigating the purchase of a new dump

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Reference no: EM131807260

Walt Wallace Construction Enterprises is investigating the purchase of a new dump truck with a 10-year life. Interest is 9%. The cash flows for two likely models are as follows:

2016_cash flows for two likely models.png

(a) Using present worth analysis, which truck should the firm buy, and why?

(b) Before the construction company can close the deal, the dealer sells out of Model B and cannot get any more. What should the firm do now, and why?

Reference no: EM131807260

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