Question

A construction firm is trying to decide which of two models of a crane to purchase. Model A costs $100,000 and requires $8000 per year to maintain. Model B has an initial cost of $80,000 and a maintenance cost of $11,000 per year. For how many years must model A be used before it becomes more economical than B?

Answer 1

Correct answer is 7 years.


`A=100,000+8,000x \\B=80,000+11,000x \\ \\A=B \\100,000+8,000x=80,000+11,000x \\20,000=3,000x \\ \\x= (20,000)/(3,000) \\ \\x\approx 6.67`