Comparing alternatives: Buy a truck vs rent a truck

Date of Exam

A contractor can buy a dump trucks for P800,000 each (surplus) or rent them for P1,189 per truck per day. The truck has salvage value of P100,000 at the end of its useful life of 5 years. Annual cost of maintenance is P20,000. If money is worth 14% per annum, determine the number of days per year that a truck must be used to warrant the purchase of the truck.

A.   200 C.   198
B.   199 D.   197


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