Question

Ten years ago, Jacobson Recovery purchased a wrecker for $285,000 to move disabled 18-wheelers. He anticipated a salvage value of $50,000 after 10 years. During this time his average annual revenue totaled $52,000. (a) Did he recover his investment and a 12% per year return? (b) If the annual M&O cost was $10,000 the first year and increased by a constant $1000 per year, was the AW positive or negative at 12% per year? Assume the $50,000 salvage was realized

Answer 1

Answer:

$5200

Explanation:

Step 1 of 4

At revenue of $52,000 per year, yes, he did