A pipeline contractor can purchase a needed truck for $42,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $3,000 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $140 per day. MARR is 7%.

Equal costs for either option at 148 days.

Question 1: If the truck is needed for 180 days/year, should the contractor buy the truck or hire a similar unit? Determine the dollar amount of annual savings generated by using the preferred altnerative rather than the nonpreffered.