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Average investment method-equivalent lease cost method

Problem: A truck is purchased for $1,500,000 and is planned to have an operating life of 10 years working 5,000 hours per year. What is the hourly owning cost of this machine , assuming the company requires a 16% return on investment ,using

1) the average investment method

2) the equivalent lease cost method

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Finance Basics: Average investment method-equivalent lease cost method

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Average investment method-equivalent lease cost method

Reference No:- TGS01744935

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Rate of return methods of capital project evaluation

Q : Amount of investments accumulate

Q : Expected value and standard deviation

Q : Owning cost-total operating and total cost

Q : Average investment method-equivalent lease cost method

Q : Calculate the after-tax yields on foregoing investment

Q : Net present value of total cost-total revenue-cash flow

Q : What is the npv of each project

Q : Lowest possible volatilty

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Average investment method-equivalent lease cost method

Reference No:- TGS01744935

Recent Questions Asked Finance Basics

Q : Rate of return methods of capital project evaluation

Q : Amount of investments accumulate

Q : Expected value and standard deviation

Q : Owning cost-total operating and total cost

Q : Average investment method-equivalent lease cost method

Q : Calculate the after-tax yields on foregoing investment

Q : Net present value of total cost-total revenue-cash flow

Q : What is the npv of each project

Q : Lowest possible volatilty

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