Transco 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 $50$ passen$-$

gers. The salvage value of either bus is estimated to be $$8,000$ after a $10-$year 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 $7\mathrm{.}5\%?$

A campus laboratory can be climate conditioned by piping chilled water from a central

refrigeration plant. Two competing proposals are being considered for the piping system,

as outlined in the table. On the basis of a $10-$year life, find the number of hours of opera$-$

tion per year for which the cost of the two systems will be equal if the interest rate is $9\%.$