8. A truck owner finds from his past experience that the maintenance costs are Rs 200 for...

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8. A truck owner finds from his past experience that the maintenance costs are Rs 200 for the first year and then increase by Rs 2,000 every year. The cost of the truck type A is Rs 9,000. Determine the best age at which to replace the truck. If the optimum replacement is followed, what will be the average Yearly cost of owning and operating the truck? Truck type B costs Rs 10,000. Annual operating costs are Rs 400 for the first Year and then increase by Rs 800 every Year. The truck owner has now the truck type A which is one Year old. Should it be replaced with B type, and ifso, when? (JCWA, June, 1985)

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