Sam is considering buying a new lawnmower. He has a choice between a Lawn Guy mower and a Bargain Joe's Clip Job mower. Sam has a

MARR

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of

5

percent. The salvage value of each mower at the end of its service life is zero.

	Lawn Guy	Clip Job
First cost	$350	$140
Life	15 years	6 years
Annual gas	$65	$45
Annual maintenance	$30	$60

a. Using the information above, determine which alternative is preferable. Use a

present worth comparison

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and the least common multiple of the service lives.

b. For a

six-year

study period

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,

what salvage value for the Lawn Guy mower would result in its being the preferred choice? What salvage value for the Lawn Guy would result in the Clip Job being the preferred choice?