A company wants to purchase a new pick-up truck. The price for the new truck is $42,000. The dealer allows the company to trade-in the old truck for $6,000. The company can payback the remaining balance through a 4-year payment plan. Given the agreed interest rate is 3%:

a) How much is the monthly payment?

b) If XYZ can only afford to pay $600 monthly, assuming other conditions remain the same, then how much down payment does the company need to make?

On second thought, if the company decides to keep the old truck. They can choose to retrofit it or not. The retrofit will cost $3,000. After the retrofit, the annual fuel and maintenance cost will be $800 for the first year and increases by $150 each year. Without the retrofit, the annual fuel and maintenance cost will be $1,600 for the first year and increases at a rate of 8% each year. c) The company will get rid of the old truck in six years, should they retrofit it or not? Assuming XYZs minimum attractive rate of return is 4%.

Please show the formulas when answering the questions.