Florida General Contractor Practice Exam

If a new truck costs $20,000 cash, has a maintenance cost of $100 per month, and fuel costs of $0.16 per mile driven (20,000 miles per year) with a salvage value of $5,000 after 5 years, what is the total cost of the truck over its lifespan?

1. $25,000

2. $24,000

3. $32,000

4. $30,000

The correct answer is: $32,000

To calculate the total cost of the truck over its 5-year lifespan, we need to consider several components: the initial purchase price, the maintenance costs, the fuel costs, and the salvage value. 1. **Initial Cost**: The truck costs $20,000. 2. **Maintenance Costs**: The monthly maintenance cost is $100. Over 5 years (which is 60 months), the total maintenance costs would be: \[ 100 \text{ (monthly cost)} \times 60 \text{ (months)} = 6,000 \] 3. **Fuel Costs**: The fuel cost is $0.16 per mile, and if the truck is driven 20,000 miles per year, over 5 years this amounts to: \[ 20,000 \text{ (miles per year)} \times 5 \text{ (years)} = 100,000 \text{ (total miles)} \] Therefore, the total fuel cost would be: \[ 0.16 \text{ (fuel cost per mile)} \times 100,000 \text{ (total miles)} = 16,000 \