Red Brick Ltd is considering replacing its existing fleet of trucks with a fleet of new trucks.It plans to evaluate two options based on the following information:
Management is considering two options:
i.Option (i)Replace the old trucks now and operate the new trucks for five years,to be replaced in perpetuity;
ii.Option (ii)Replace the old trucks in five years' time and operate the new trucks for five years,to be replaced in perpetuity.
Which option should the management choose?
A)Option (i).
B)Option (ii).
C)Indifferent between the two options.
D)Not enough information.

Question

Red Brick Ltd is considering replacing its existing fleet of trucks with a fleet of new trucks.It plans to evaluate two options based on the following information: 
Management is considering two options:
i.Option (i)Replace the old trucks now and operate the new trucks for five years,to be replaced in perpetuity;
ii.Option (ii)Replace the old trucks in five years' time and operate the new trucks for five years,to be replaced in perpetuity.
Which option should the management choose?
A)Option (i). 
B)Option (ii). 
C)Indifferent between the two options. 
D)Not enough information.

Quizplus · Accepted Answer

The Answer of Red Brick Ltd is considering replacing its existing fleet of trucks with a fleet of new trucks.It plans to evaluate two options based on the following information: 
Management is considering two options:
i.Option (i)Replace the old trucks now and operate the new trucks for five years,to be replaced in perpetuity;
ii.Option (ii)Replace the old trucks in five years' time and operate the new trucks for five years,to be replaced in perpetuity.
Which option should the management choose?
A)Option (i). 
B)Option (ii). 
C)Indifferent between the two options. 
D)Not enough information.

Red Brick Ltd Is Considering Replacing Its Existing Fleet of Trucks