Acme Landfill Company is considering the purchase of 10 better trash collection trucks. Each truck costs $50,000 and will last 7 years. the firm estimates that the entire purchase will increase its annual total annual revenues by $100,000 per year for as long as the trucks last.
a) If the real interest rate is 10%, should the firm buy the 10 trucks?
b) Would your answer to part a change if the interest rate fell to 8%? Show your calculation and briefly explain as necessary.