Q)land development company is considering the purchase of earth-moving equipment. This equipment will have an estimated first cost of $163,000, a salvage value of $65,000, a life of 10 years, a maintenance cost of $40,000 per year, and an operating cost of $420 per day. Alternatively, the company can rent the necessary equipment for $1030 per day and hire a driver at $180 per day. If the company’s MARR is 15% per year, how many days per year must the company need the equipment in order to justify its purchase? The company must need the equipment ____ days per year in order to justify its purchase.

Refrigeration and Air Conditioning Technology (MindTap Course List)
8th Edition
ISBN:9781305578296
Author:John Tomczyk, Eugene Silberstein, Bill Whitman, Bill Johnson
Publisher:John Tomczyk, Eugene Silberstein, Bill Whitman, Bill Johnson
Chapter2: Matter And Energy
Section: Chapter Questions
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Q)land development company is considering the purchase of earth-moving equipment. This equipment will have an estimated first cost of $163,000, a salvage value of $65,000, a life of 10 years, a maintenance cost of $40,000 per year, and an operating cost of $420 per day. Alternatively, the company can rent the necessary equipment for $1030 per day and hire a driver at $180 per day.

If the company’s MARR is 15% per year, how many days per year must the company need the equipment in order to justify its purchase?

The company must need the equipment ____ days per year in order to justify its purchase.

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