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Solomon Freight Company owns a truck that cost $41,000. Currently, the truck's book value is...

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Accounting

Solomon Freight Company owns a truck that cost $41,000. Currently, the truck's book value is $24,000, and its expected remaining useful life is five years. Solomon has the opportunity to purchase for $27,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,600 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 $18,000.
Required
Calculate the total relevant costs. Should Solomon replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?
\table[[,Keep Old,\table[[Replace With],[New]]],[Total relevant costs,,],[Should Solomon replace or continue the old truck?,,]]
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