cruzhazeL999
cruzhazeL999
05.11.2021 • 
Business

An independent contractor for a transportation company needs to determine whether she should upgrade the vehicle she currently owns or trade her vehicle in to lease a new vehicle. If she keeps her vehicle, she will need to invest in immediate upgrades that cost $ 5,400 and it will cost $ 1,500 per year to operate at the end of year that follows. She will keep the vehicle for 5 years; at the end of this period, the upgraded vehicle will have a salvage value of $ 3,900. Alternatively, she could trade in her vehicle to lease a new vehicle. She estimates that her current vehicle has a trade-in value of $ 9,200 and that there will be $ 4,000 due at lease signing. She further estimates that it will cost $ 3,300 per year to lease and operate the vehicle. The independent contractor's MARR is 14%. Compute the EUAC of both the upgrade and lease alternatives using the insider perspective.

Solved
Show answers

Ask an AI advisor a question