A pipeline contractor can purchase a needed truck for $40000

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1. 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 is7%
a. How many days/year must the truck’s services be needed such thatthe two alternatives are equally costly?
b. If the truck is needed for 180 days per year, should thecontractor buy the truck or hire the similar one? Why?

2. ABC Inc. is considering  purchasing  flow valves thatwill reduce annual operating costs by $ 10,000  per year forthe next 12 years. ABC Inc  MARR is 12%/year. Using  a PW  approach  determine  the maximum  amount ABC inc should  be  willing  topay  for the valves.

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