A construction firm is considering buying a backhoe, since itpays $50/h to rent one, and it needs to use a backhoe for 150 hoursper month. Assuming a backhoe lasts 5 years, and has monthlymaintenance of $2,000 and a salvage value of $15,000, what’s themost the company should pay for this backhoe? (Use a 6% discountrate)
