Question: 1 - 80 points - A trencher is available for $72,000 with an estimated resale value in 10 years of $5,000. The O&M costs are

1 - 80 points - A trencher is available for $72,000 with an estimated resale value in 10 years of $5,000. The O&M costs are estimated at $35/hr, increasing each year by $2/hr. It is capable of digging a trench at an average rate of about 50 ft/hr. The alternate method is to buy a backhoe at $54,000 with a resale value of $5,000 in 10 years and O & M costs of $26/hr, increasing each year by $.50/hr. It can dig a trench at an average rate of 20 ft/hr. Find: How many feet of trench per year must be dug to justify the trencher (i = 15%)? Plot the results on a graph. (Ans. = 4,990 ft/yr)

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