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A shopping center is contracting snow removal from its parking lots at a cost of $430/day. However, a snow- removal machine can be purchased for
A shopping center is contracting snow removal from its parking lots at a cost of $430/day. However, a snow- removal machine can be purchased for $24,000 with an estimated useful life of 6 years, but no salvage value. The annual operating and maintaining costs are estimated as $4,500. The MARR for this problem is 12%. a) When you draw a cash flow diagram for the snow removal machine option, what is the net value (i.e., sum) of the cash flows that occur at year 3? b) When you draw a cash flow diagram for the snow removal contract option, what is the net value (i.e., sum) of the cash flows that occur at year 5? c) What is the break-even value number of days per year that snow removal is required to justify purchasing the snow-removal machine? Round up to the next largest whole day
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