Question: Dick Dickerson Construction Inc. has asked to you help them select a new backhoe. You have a choice between a wheel-mounted version, which costs $50,000

Dick Dickerson Construction Inc. has asked to you help them select a new backhoe. You have a choice between a wheel-mounted version, which costs $50,000 and has an expected life of 5 years and a salvage value of $2000, and a track-mounted one, which costs $80,000, with a 5-year life and an expected salvage value of $10,000. Both machines will achieve the same productivity. Interest is 8%. Which one will you recommend? Use a present worth analysis.

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