what is the cost or benefit of purchasing the new truck 592982
Barb’s Fine Bakery is considering purchasing a new truck for the business. Barb’s existing truck is a gas guzzler, and with increases in the costs of fuel, she feels she may be able to save a great deal of money if she bought a new hybrid truck. Both the old and new trucks are expected to last five years. The following information relates to both the new and the old truck:
|
Old Delivery Truck |
New Delivery Truck |
|
|
Original cost |
$45,000 |
$60,000 |
|
Market value |
15,000 |
60,000 |
|
Annual operating costs |
10,000 |
5,000 |
What is the cost or benefit of purchasing the new truck?
- $40,000 cost
- $45,000 cost
- $10,000 benefit
- $20,000 cost