3. Adams County has 90 older model school buses. The county officials are contemplating replacing all the buses with 83 larger buses, each costing $131,000. Because of new routings, the school board believes that the traffic is manageable with fewer buses. The busses operate 250 days per year and the average travel distance per bus is 32 miles per day. The new buses fuel efficiency is rated at 11 mpg whereas the current fleet is providing 8 mpg. Fuel is assumed to cost an average of $2.50/gallon. Under the existing system, the average annual wage is $30,000/ driver. Under the new system that wage is $32,000/driver. The new system will result in permanent discharge of 7 drivers. However the discharge will result in a one-time severance package of $20,000/driver incurred immediately. Other non-people related operating costs (like insurance, oil change etc.) is estimated to be $6,800 per year per vehicle for the new fleet and $8,900 per year per vehicle for the existing older fleet. The new vehicles are expected to last 12 years, at which time they will be replaced. The expected salvage value of the new vehicles at the end of 12 years is $12,500 per bus. The county uses MARR (i.e., interest rate) of 6%. The existing buses have a salvage value (today) of $15,000 each. If the Commission decides to keep the existing buses, they need to spend $17,000 per bus for improvements so that they too can be made to last next 12 years. Such a makeover is expected to occur at the end of 3rd year (3 years from today). The existing buses salvage value at the end of 12 years are expected to be $0. Determine the Present Worth of replacing the fleet. What is the corresponding value when converted to Annual Worth a value that would be typically useful for discussion with county decision board? Note that the analysis is performed as a before tax analysis this is a county problem and as such there are no tax issues or federal depreciation issues to contend with.