An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is$40,000, and the implicit cost is 555,000. All revenues are received, and costs borne, at the end of each year.
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On January 1, Year 1, Friedman Company purchased a truck that cost $33,000. The truck had an expected useful life of 100,000 miles over 8 years and an $7,000 salvage value. During Year 2, Friedman drove the truck 34,000 miles.
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