The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota...
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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 $29,000. Annual maintenance costs for the Explorer are expected to be $750 per year more than that of the 4Runner. The purchase price for Toyota 4Runners is 36,750 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 27% per year, which vehicle should it buy? a) The incremental ROR between the two vehicles is 7%. b) The firm should buy Click to select) 9 as the incremental ROR is ick to elect)y B the MARR
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