1. A concrete mixer can be driven by a diesel engine or a gasoline engine described as follows: Diesel Engine Gasoline Engine First cost 1.6M 25,000 Life in yrs 10yrs 4yrs Fuel for 8hrs 5 gal 40 lits Operator 350/8hrs 350/8hrs Repairs and maintenance 500/day 300/day If money is worth 10% compounded quarterly, which do you think is more profitable to acquire? Assuming you will use the mixer only for 6yrs? At the end of the life of the engines their value is zero. Depreciate by straight line method. Assume 300working days in 1 yr.

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