A trucking company evaluates its fleet of vehicles. According to its balance sheet, a three-year-old van has the book value of $21 870. Currently its maintenance costs are $1 000 per year. They have increased by 20% annually and are expected to increase by the same percentage in the future. Calculate the equivalent annual costs for the first six years knowing that the van's purchase price was $30 000 and the minimum acceptable rate of return is 15%.

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The Answer of A trucking company evaluates its fleet of vehicles. According to its balance sheet, a three-year-old van has the book value of $21 870. Currently its maintenance costs are $1 000 per year. They have increased by 20% annually and are expected to increase by the same percentage in the future. Calculate the equivalent annual costs for the first six years knowing that the van's purchase price was $30 000 and the minimum acceptable rate of return is 15%.

A Trucking Company Evaluates Its Fleet of Vehicles