A construction company can purchase a piece of equipment for $50,000 and spend $100 per day in operating costs The equipment will have a 5 year life with no salvage value Alternatively, the company can lease the equipment for $400 per day The number of days per year the company must require the equ...

Lets say the company uses equipment for x days Therefor ...

A construction company can purchase a piece of equipment for $50,000 and spend $100 per day in

Question:

A construction company can purchase a piece of equipment for $50,000 and spend $100 per day in operating costs. The equipment will have a 5-year life with no . Alternatively, the company can lease the equipment for $400 per day. The number of days per year the company must require the equipment to justify its purchase at an interest rate of 8% per year is closest to:
(a) 10 days
(b) 42 days
(c) 51 days
(d) 68 days

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...