Answer to Question #284577 in Economics for Pragathi

Question

Ramsis is a heavy equipment rental company. It is considerang the purchase of Tower crane at a price of BD 775,000. This crane is expected to operate for 15 years before returement with no salvage value at the end. The company as plan to rent the crane for BD 108.000 per year stang year and the rental increases by 10% thereafter. Cost of thas mantenice is expected to be BD 15,000 each year. a) Wisat is the discounted payback period if the MARR is 7% per year? b) In your enemeening analysis study, which method would you select (Payback or Present worth) to solve this problem? And why?

Answer 1

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