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Required information

A land development company is considering the purchase of earth$-$moving equipment. This

equipment will have an estimated first cost of $$169,000,$ a salvage value of $$65,000,$ a life

of $10$ years, a maintenance cost of $$36,000$ per year, and an operating cost of $$260\mathrm{.}0$ per

day. Alternatively, the company can rent the necessary equipment for $$1,030$ per day and

hire a driver at $$180$ per day.

When approached to rent for the breakeven number of days, the equipment owner indicated that the

minimum rental is for $100$ days per year; however, he might consider a lower daily rental cost. What is the

daily rental cost to justify renting over purchasing? If the equipment was purchased, assume it would be used

for the breakeven number of days. Determine the required rental cost per day.

The daily rental cost to justify renting over purchasing is determined to be $