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a 6. (10 pts) The city of East Lansing is considering purchasing new buses. They have different initial costs, operating and maintenance costs and benefits.

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a 6. (10 pts) The city of East Lansing is considering purchasing new buses. They have different initial costs, operating and maintenance costs and benefits. Use a 6% annual interest rate in your calculations. Initial cost Life Annual operations and maintenance Annual benefits Salvage value Diesel $200,000 10 years $35,000 $120,000 $10,000 Hybrid $400,000 12 years $10,000 $120,000 $15,000 a) Calculate the benefit to cost ratio and determine if all options are acceptable. (3pts) b) Select the best alternative (7pts)

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