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Question: A firm has been approached by a firm that has stated that by replacing the engines in their current fleet UTC will save over the 6 period life of the engine twice the period capital recovery amount each period in labor for repairs and maintenance that would be incurred if UTC continued using the buses with the old engines. UTC uses an interest rate of 6.0 percent. What savings in labor per bus could UTC expect if the promise is true and the engine cost is 64,000 per bus.

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Category:- Basic Finance
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