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1. What is the Net Present Value for Machine B? 2. What is the annual rate of return? Crane Corp. is considering purchasing one of
1. What is the Net Present Value for Machine B?
2. What is the annual rate of return?
Crane Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here. Indigo Growth Farms, a farming cooperative, is considering purchasing a tractor for $568,280. The machine has a 10 -year life and an estimated salvage value of $57,000. Delivery costs and set-up charges will be $14,200 and $440, respectively. Indigo Growth uses straight-line depreciation and has a required rate of return of 9%. Indigo Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $440. Fuel is $60 for each use of the tractor. The present value of an annuity of 1 for 10 years at 9% is 6.41766 . Click here to view PV tables. For the new tractor, compute theStep by Step Solution
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