Assuming the cost and benefits are incurred at the end of the year,

 Based on the scenario below:

Buying larger garbage trucks it could reduce labor cost for garbage removal. 

The cost of the trucks today (one year later) is $400,000.

The annual savings in this year’s dollars is $90,000.

The trucks will last for four years and then will be sold for $100,000.

The city can borrow money at a 7% discount rate to purchase the trucks.

Inflation for the next four years is expected to average 3%.

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