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? Required information A land development company is considering the purchase of earth - moving equipment. This equipment will have an estimated first cost of
Required information
A land development company is considering the purchase of earthmoving equipment. This
equipment will have an estimated first cost of $ a salvage value of $ a life
of years, a maintenance cost of $ per year, and an operating cost of $ per
day. Alternatively, the company can rent the necessary equipment for $ per day and
hire a driver at $ per day.
When approached to rent for the breakeven number of days, the equipment owner indicated that the
minimum rental is for days per year; however, he might consider a lower daily rental cost. What is the
daily rental cost to justify renting over purchasing? If the equipment was purchased, assume it would be used
for the breakeven number of days. Determine the required rental cost per day.
The daily rental cost to justify renting over purchasing is determined to be $
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