Question: Problem 3: Your hospital is evaluating two alternative delivery trucks. Truck A has an initial cost of $27,000 and expected annual operating costs of $7,000.

Problem 3: Your hospital is evaluating two alternative delivery trucks. Truck A has an initial cost of $27,000 and expected annual operating costs of $7,000. Truck A has an estimated seven-year life. Truck B will cost $20,000 and will last five years, with annual operating costs of $10,000. Which truck has the lowest equivalent annual cost if your discount rate is 8%?

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