Question

A construction firm is trying to decide which of two models of a crane to purchase. Model A costs $100,000 and requires $4,000 per year to maintain. Model B has an initial cost of $78,000 and a maintenance cost of $13,000 per year. For how many years must model A be used before it becomes more economical than B? (Round your answer to one decimal place.)

Answer 1

Let A and B be the functions which calculate the cost of purchase and maintenance of the models for x years.

The functions are as follows:

A(x)=100,000+4,000x (dollars)

B(x)=78,000+13,000x (dollars)


Model A becomes more economical than Model B when A(x)<B(x),

so we solve:

100,000+4,000x<78,000+13,000x

100,000-78,000<13,000x-4,000x

22,000< 9000x

22<9x

x>22/9=2.444

Model A becomes more economical in the third year, that is after the first 2 years.