What are the values of e for the buy case and then rent case

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Reference no: EM131965621

Problem

A profitable company has two options:1) $13,000 truck, salvage value is $3000 at end of 7 years, straight line depreciation, maintenance is $1100/year, daily expenses $35/day, Or 2) $83/day rental. The company has a MARR of 10% and pays an income tax rate of 50%. How many days must the truck be used to justify purchase?

1) What are the values of E for the buy case and then the rent case?

2) What goes in cell F for buy/rent (assume "days" is a master cell reference)?

3) What goes in cell G for buy/rent?

4) What goes in cell H (tax deduction) for buy/rent?

5) What goes in cell I (tax savings)?

6) What value of days used makes the two options equal in NPV when i=10%?

Reference no: EM131965621

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