Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 37

A regional infrastructure building and maintenance contractor is trying to decide whether to buy a new compact horizontal directional drilling (HDD) machine now or wait to buy it 2 years from now (when a large pipeline contract will require the new equipment). The HDD machine will include an innovative pipe loader design and maneuverable undercarriage system. The cost of the system is $68,000 if purchased now or $81,000 if purchased 2 years from now. At a real MARR of 10% per year and an inflation rate of 5% per year, determine if the company should buy now or later
a) without any adjustment for inflation and
b) with inflation considered.