A pipeline contractor can purchase a needed truck for \($40,000.\) Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be \($2,400\) per year. Operating expense is \($60\) per day. The contractor can hire a similar unit for \($150\) per day. MARR is 7 percent.

a. How many days per 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/year, should the contractor buy the truck or hire the similar unit?

Determine the dollar amount of savings generated by using the preferred alternative rather than the nonpreferred.