Question: v 2. A city has learned that by buying larger garbage trucks, it could reduce labor costs for garbage removal. Note: All the dollar amounts

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v 2. A city has learned that by buying larger garbage trucks,

2. A city has learned that by buying larger garbage trucks, it could reduce labor costs for garbage removal. Note: All the dollar amounts below are in this year's dollars (constant dollars), - Cost of the trucks today is $400,000. - Annual savings in this year's constant dollars is $90,000. - Trucks will last for 4 years and then will be sold for $100,000. - The city can borrow money at a 7% discount rate to purchase the trucks. - Inflation (for the next 4 years) is expected to average 3%. Assuming the costs and benefits are incurred at the end of the year, should the city buy the trucks

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