What should the contractor do

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Reference no: EM132157883

Question: A contractor estimates maintenance costs for a new backhoe to be $275 for the first month with a monthly increase of 0.5%. The contractor can buy a 4-year maintenance contract for $18,500 at any point. If the contract is purchased at the same time as the back hoe is purchased, the dealer has offered a 10% discount. Use i = 0.75% per month. What should the contractor do?

Reference no: EM132157883

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