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Sagot :
Answer: 45.92%
Explanation:
Annual Cash Inflows = (Net Savings - Depreciation) * ( 1 - Tax Rate) + (Depreciation * Tax Rate)
Net savings = Delivery Costs - Operating and Maintenance Costs with the Used Truck
= 30,000 - 23,000
= $7,000
Depreciation = (Cost of used truck - Salvage value) / Useful life
= (11,000 - 3,000) / 3
= $2,667
Annual Cash inflows = $7,000 as there are no taxes.
Use Excel to calculate IRR as shown in the attachment.
The cost of the truck is the outflow and the savings and the salvage value are inflows.
IRR = 45.92%

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