Make a decision on replacing its garbage truck

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Reference no: EM131578566

The Town of Millbridge has to make a decision on replacing its garbage truck. It has narrowed the choice down to two different models. Model A will initially cost $80,000 and then will cost $5,000 per year to operate for its 20-year life. Model B will initially cost $100,000 and then will cost %2,500 per year to operate for its 30-year life. Use the annualized cost approach to determine which is a better choice. Assume a discount rate of 5 percent year year.

Reference no: EM131578566

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