A truck costs sh 3000,000. The annual running cost (sh 000) and the resale price (sh 000) in a given year is as follows:-
Year (End)
1
2
3
4
5
6
7
Running cost
400
500
600
700
800
1100
1300
Selling price
2100
1300
1000
750
500
300
300
The truck may be replaced by a second hand one too, which may be one, two up to six years old. The cost (sh 000) of buying a truck of various ages follows:
Age of lorry (years)
1
2
3
4
5
6
Purchase price
2400
1700
1400
1100
800
700
Required: Given this possibility, determine the optimal age to buy and sell the truck