1. Several of the new city council members "are up in arms" over the new annual fee and cost structure. However, they do not want to build more fire station capacity or own a lader truck that will be used an average of only 20 times a year. They believe Brewster can be convinced to reduce or remove the annual $30,000 fee. How much the annual must be reduced for the alternative to purchase the ladder truck to be rejected?
2. Another council member is willing to pay the annual fee, but wants to know how much the building costs can change from $500,000 to make the alternatives equally attractive. Find this first cost of the building.
3. Finally, a compromise proposal offered by the Medford mayor might be acceptable to Brewster. Reduce the annual fee by 50%, and reduce the per event charges to the same amount that the Medford fire chief estimates it will cost if the truck is owned. Then Medford will possibly adjust (if it seems reasonable) the sum of the insurance premium reduction and property loss reduction estimates to just make the arrangement with Brewster nore attractive than owning the truck. Find this sum (for the estimates of premium reduction and property loss reduction). Does this new sum seem reasonable relative to the previous estimates?