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Q2) a) The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers...

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Q2) a) The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4Runners for company principals. The purchase price for the Ford Explorer will be $31,000. Annual maintenance costs for the Explorer are expected to be $725 per year more than that of the 4Runner. The purchase price for Toyota 4Runners is 37,000 The trade in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm's MARR is 15% per year, which vehicle should it buy? a) The incremental ROR between the two vehicles is b) The firm should buy (Click to select) as the incremental ROR is (Click to select the MARR. Click to select) less than greater than b) A broadband service company borrowed $2 million for new equipment and repaid the loan in amounts of $218,000 in years 1 and 2 plus a lump sum amount of $2.25 million at the end of year 3. What was the interest rate on the loan? The rate of interest on the loan was

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