Using the preferred alternative rather than non preferred

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A pipeline contractor can purchase a needed truck for $36,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2,200 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $100 per day. MARR is 7%.

How many days per year must the truck’s services be needed such that the two alternatives are equally costly?

If the truck is needed for 180 days/year, should the contractor buy the truck or hire the similar unit? Entry field with correct answer Buy the truck/Hire the similar unit

Determine the dollar amount of savings generated by using the preferred alternative rather than the non preferred.

Reference no: EM13974952

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