6. A Mining Company owns and uses a fleet of 5 trucks for transportation of ore from the Mine to the Concentrator. The maintenance costs of the trucks are becoming a cause for concern. To reduce costs, three alternatives are being considered for this job in the future, namely, rebuilding of present mine equipment, purchasing of new trucks, and employing a contractor who will use own equipment. Details for the alternatives are tabulated below. Rebuild Purchase Contract Initial cost, US$ 500,000 1,500,000 50,000 Annual Costs - Maintenance, USS 150,000 105,000 Labour, USS 240,000 200,000 - Consumables, USS 85,000 - Contractor, USS 550,000 Life of Mine, years 10 Salvage Value, USS 0 150,000 0 If interest is 10% annually, which option is more favourable from a cost (current or future) point of view? (15 marks) OOO 60,000 0 0 10 10