A bulk materials hauler purchased a used dump truck for $50,000 two years ago. The operating costs have been $5000 per month and revenues have averaged $7500 per month. The truck was just sold for $11,000. The rate of return is closest to: (choose one)
(a) 2.6% per month
(b) 2.6% per year
(c) 3.6% per month
(d) 15.6% per year
0 = -50,000 + (7500 – 5000)(P/A,i*,24) + 11,000(P/F,i*,24)
i* = 2.6% per month
Answer is (a) 0 = -50,000 + (7500 – 5000)(P/A,i*,24) + 11,000(P/F,i*,24)
i* = 2.6% per month
Answer is (a)
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