A company has a need for a snow removal machine. The machine can be purchased for the cost of $25,000. The machine is expected to have a life of 6 years with no salvage value. The annual operating cost amounts to $5,000. Alternatively, the machine can be rented at the cost of $400 per day payable at the end of the year. (b) Based on your answer of Q34, Determine the number of days per year that snow removal is required in order to justify the purchase decision. Use an interest rate of 10% per year.
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