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 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?

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

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