Lynch Freight Company owns a truck that cost $49, 000. Currently, the truck\'s b

Question

Lynch Freight Company owns a truck that cost $49, 000. Currently, the truck's book value is $25, 000, and its expected remaining useful life is five years. Lynch has the opportunity to purchase for $29, 000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6, 800 per year more than fuel cost for the new truck. the old truck is paid for but, in spite of being in good condition, can be sold for only $11, 000. Required: Calculate the total relevant costs. (Omit the "$" sign in your response. ) Should Lynch replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Continue to use the old truck Replace the old truck

Explanation / Answer

keeping the old one is 6800*5+11000=$45000

buying a new one its =$29000

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