1. A company buys a pickup truck for $25,000. Each year the truck is in service the trade in value decreases by 20%. Maintenance on the truck will run $2,000 per year while increasing by 15% each year it is in service. The company uses an MARR of 12%. Find the Annual Equivalent Cost for the second year.
A: $8756.87
B: $5325.30
C: $7245.30
D: $6325.30
E: $9386.87
2. Assume that Mexican investors are benefitting from covered interest arbitrage due to a high U.S. interest rate. Because of this, the MXN spot rate is likely to ________________ and the MXN forward rate is likely to _________
Appreciate; appreciate
Depreciate, appreciate
Appreciate; depreciate
Depreciate; appreciate