with the steps of the solution

b. 17.5 marks] A small pump costs $20,000 and has a life of eight years. The pump will have a $4,000 SV at that time. If the 150% DB method is used to depreciate the pump, the BV at the end of year five is approximately equal to i. $5,000 ii. $6,000 iii. $7,000 iv. $8,000 c. 17.5 marks] The city council is considering the purchase of a new fire truck. The capital investment is $50,000 and the maintenance expenses per year are $6,000. The fire truck has a life of six years and by using this truck there will be an annual reduction in fire damage of $20,000. If the MARR is 12% per year, what is the modified B-C ratio for this truck using the annual worth method? i. 1.15 ii. 0.87 iii. 1.64 iv. 1.41