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Your company is looking at purchasing a dump truck and has narrowed the selection to two pieces of equipment. The first truck costs $65,000 with

Your company is looking at purchasing a dump truck and has narrowed the selection to two pieces of equipment. The first truck costs $65,000 with a useful life of four years. At the end of the fourth year the salvage value is estimated to be $10,000. The dump truck could be billed out at $68.00 per hour and costs $13.00 per hour to operate. The second truck costs $125,000 with a useful life of eight years. At the end of the eighth year the salvage value is estimated to be $10,000. The loader could be billed out at $98.00 per hour and costs $30.00 per hour to operate. The operator of either alternative costs $35.00 per hour. Using 1,000 billable hours per year, determine the NPV for the purchase of the dump truck using a MARR of 18%. Which truck should your company purchase using a MARR of 15%?

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