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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 399 Weeks Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Apple Crisp Foods signed a contract some years ago for maintenance services on its fleet of trucks and cars. The contract is up for renewal now for a period of 1 year or 2 years only. The contract quote is $300,000 per year if taken for 1 year and $240,000 per year if taken for 2 years. The finance vice president wants to renew the
contract for 2 years without further analysis, but the vice president for engineering believes it is more economical to perform the maintenance in-house. Since much of the fleet is aging and must be replaced in the near future, a fixed
3-year study period has been agreed upon. The estimates for the in-house (challenger) alternative are as follows:

The effective tax rate is 35%, and the after-tax MARR is 10% per year. Perform an after-tax AW analysis, and determine which vice president has the better economic strategy over the next 3 years.
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