An engineer is trying to decide between two ways to pump concrete up to the top floors of a seven-storey building under construction. Plan 1 requires the purchase of equipment costing

` 300,000 and costing between ` 20 per ton and ` 35 per ton to operate with the expected cost of ` 25 per ton. The equipment is able to pump100 tons per day. If purchased, the equipment will last for 5 years, have no salvage value, and can be used for 50 to 100 days per year. Plan 2 is an equipment-leasing option and is expected to cost ` 125,000 per year for equipment, with an optimistic cost of ` 90,000 and a pessimistic value of ` 160,000 per year. In addition, a ` 250 perhour labour cost will be incurred for operation of the leased equipment.

Plot the equivalent uniform annual cost of each plan versus total annual operating cost and lease cost at i 5 12 per cent. Determine which plan should be selected for use of

a. 50 days per year and

b. 100 days per year.