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# A delivery truck has the book value of \$10,000 at the end of year 5. The purchase price of the truck was \$30,000.

A delivery truck has the book value of \$10,000 at the end of year 5. The purchase price of the truck was \$30,000. If the minimum acceptable rate of return is 15%, what is the equivalent annual capital cost of the truck at the end of its sixth year?

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Required rate of return ('r)
Purchase Price of Truck (P)
Period (n) 15%
30000
6 yrs Formula for Equivalent Annual Capital Cost (EAC)= P/A6,15
Where A6,15=
Here A6,15 =
Therefore EAC =
Book Value at...

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