Diamond Construction Services is considering changing its strategy for plant purchasing. The following table lists the company's current and potential strategies. Current Strategy New Strategy Total capital cost 7,800,000 7,000,000 Maintenance cost 40,000 per year 200,000 per year for the 1st 2 years, then increasing by 40,000 a year Net hire income 2,000,000 per year 1,740,000 per year for the 1st 3 years, then reducing by 80,000 a year Life of plant 3 years 8 years Resale value 5,000,000 1,600,000 Discount rate to be used in the analysis is 9%. a) Based on financial appraisal techniques alone, advise the company on what strategy to adopt. (15 marks) b) Calculate the minimum resale value needed for the losing strategy in order for you to change your recommendation. (9 marks) c) Discuss other variables that could potentially affect your decision in (b) aside from resale value. (Word limit 200 words) (9 marks)