The Autocar E3 refuse truck has an energy recovery system developed by Parker Hannifin LLC that is expected to reduce fuel consumption by 50%. Pressurized fluid flows from carbon fiber-reinforced accumulator tanks to two hydrostatic motors that propel the vehicle forward.
(The truck recharges the accumulators when it brakes.) The fuel cost for a regular refuse truck is $900 per month. How much can a private waste-hauling company afford to spend now on the recovery system, if it wants to recover its investment in 3 years plus a return of 14% per year, compounded semiannually? Assume no inter-period compounding.