A contractor is considering whether he should buy or rent another excavator. The one he is...

 

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A contractor is considering whether he should buy or rent another excavator. The one he is considering will cost $50,000 with a maintenance cost of $15,000/year and an operating cost of $40 per day. Its salvage value will be $22,000 if sold after the 5 year study period. If rented on a daily basis, the cost will be $250 per day. At an interest rate of 10%/year, determine the number of days per year the equipment must be needed for breakeven. A contractor is considering whether he should buy or rent another excavator. The one he is considering will cost $50,000 with a maintenance cost of $15,000/year and an operating cost of $40 per day. Its salvage value will be $22,000 if sold after the 5 year study period. If rented on a daily basis, the cost will be $250 per day. At an interest rate of 10%/year, determine the number of days per year the equipment must be needed for breakeven.

Answer rating: 100% (QA)

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