Question: Question:1 A contractor estimates maintenance costs for a new backhoe to be $263 for the first month with a monthly increase of 0.5% . If

Question:1 A contractor estimates maintenance costs for a new backhoe to be $263 for the first month with a monthly increase of 0.5%. If the annual interest rate is 6%. The contractor is planning to sell it after 4 year. What is the present value of the maintenance cost?

Question:2

Your company is planning to purchase a new loader for $22,747. If the company keeps the old loader, it will have $1,244 additional maintenance cost for the first year and increases $532 each year till the eighth year. Given the companys minimum attractive rate of return (MARR) is 6%, what is the present cost of keeping the old loader?

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