Problem
A contractor estimates maintenance costs for a new backhoe to be $275 for the first month with a monthly increase of 0.5%. The contractor can buy a 4-year maintenance contract for $18,500 at any point. If the contract is purchased at the same time as the back hoe is purchased, the dealer has offered a 10% discount. Use i = 0.75% per month. What should the contractor do? Contributed by Hamed Kashani, Saeid Sadri, and Baabak Ashuri, Georgia Institute of Technology
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.