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Three years ago Chicago's O'Hare Airport purchased a new fire truck. Because of flight in- creases, new fire-fighting capacity is needed once again. An additional truck of the same capac- ity can be purchased now, or a double-capacity truck can replace the current fire truck. Esti- mates are presented below. Compare the options at 12% per year using (a) a 12-year study period and (b) a 9-year study period. Presently owned New Purchase Double Capacity First cost P, $ - 151.000 (3 years ago) - 175,000 - 190,000 AOC, - 1,500 - 1,500 -2,500 Market value, $ 70,000 Salvage value, s 10% of P 12% of P 12 12 12 10% of P Life, years Three years ago Chicago's O'Hare Airport purchased a new fire truck. Because of flight in- creases, new fire-fighting capacity is needed once again. An additional truck of the same capac- ity can be purchased now, or a double-capacity truck can replace the current fire truck. Esti- mates are presented below. Compare the options at 12% per year using (a) a 12-year study period and (b) a 9-year study period. Presently owned New Purchase Double Capacity First cost P, $ - 151.000 (3 years ago) - 175,000 - 190,000 AOC, - 1,500 - 1,500 -2,500 Market value, $ 70,000 Salvage value, s 10% of P 12% of P 12 12 12 10% of P Life, years