A better deal of dumpsters for the city.

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Chapter 9, Problem 9.10P

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A better deal of dumpsters for the city.

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An airport needs a modern material handling system for facilitating access to and from a busy maintenance hangar. A second-hand system will cost $75,000. A new system with improved technology can decrease labor hours by 20% compared to the used system. The new system will cost $150,000 to purchase and install. Both systems have a useful life of ﬁve years. The market value of the used system is expected to be $20,000 in ﬁve years, and the market value of the new system is anticipated to be $50,000 in ﬁve years. Current maintenance activity will require the used system to be operated 8 hours per day for 20 days per month. If labor costs $40 per hour and the MARR is 1% per month, which system should be recommended?

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