Determine the maximum amount fabco

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Reference no: EM13200873

Fabco Inc. is considering purchasing flow valves that will reduce annual operating costs by $ 10,000 per year for the next 12 years. Fabco's MARR is 12%/year. Using a PW approach determine the maximum amount Fabco should be willing to pay for the valves.

8. A pipeline contractor can purchase a needed truck for $40000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2400/year. Operating expenses is $60/day.The constructor can hire a similar unit for $150/day. MARR is 7%

A. How many days/year must the truck's services be needed such that the two alternatives are equally costly?

B. If the truck is needed for 180 days per year, should the contractor buy the truck or hire the similar one? Why?

Reference no: EM13200873

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