Question 1 (10 points) XYZ Construction Inc. wants to purchase a new pick-up truck. The price for the new truck is $42,000. The dealer allows XYZ to trade in the old truck for $6,000. XYZ can payback the remaining balance through a 4-year payment plan. Given the agreed interest rate is 3%: a) How much is the monthly payment? (2 points) b) If XYZ can only afford to pay $600 monthly, assuming other conditions remain the same, then how much down payment XYZ needs to make? (2 points) On second thoughts, XYZ decides to keep the old truck. They can choose to retrofit it or not. The retrofit will cost $3,000. After the retrofit, the annual fuel and maintenance cost will be $800 for the first year and increases by $150 each year. Without the retrofit, the annual fuel and maintenance cost will be $1,600 for the first year and increases at a rate of 8% each year. c) If XYZ will get rid of the old truck in six years, should they retrofit it or not? Assuming XYZ's minimum attractive rate of return is 4% (6 points)