Transco plans on purchasing a bus for $$75,000$ that will have a capacity of $40$ passengers. As anTransco plans on purchasing a bus for $$75,000$ that will have a capacity of $40$ passengers. As an

alternative, a larger bus can be purchased for $$95,000$ that will have a capacity of $50$ passengers. The

salvage value of either bus is estimated to be $$8,000$ after $10$ years life. If an annual net profit of $$400$

can be realized per passenger, which alternative should be recommended using a management$-$

suggested interest rate of $15\%?$ Using the actual cost of money at $7\mathrm{.}5\%?$

alternative, a larger bus can be purchased for $$95,000$ that will have a capacity of $50$ passengers. The

salvage value of either bus is estimated to be $$8,000$ after $10$ years life. If an annual net profit of $$400$

can be realized per passenger, which alternative should be recommended using a management$-$

suggested interest rate of $15\%?$ Using the actual cost of money at $7\mathrm{.}5\%?$