An investment costing $50,000 today will result in cash savings of $5,000 per year for 15 years. Use trial and error to approximate the internal rate of return for this investment proposal. Group of answer choices

5% = 1,899 and 6% = (1,439)

5% = 3099 and 6% = 1,439

5% = (99) and 6% = (1,439)

5% = 9,899 and 6% = (5,439)

Net Present Value Analysis.Excavating, Inc., would like to purchase a tractor for $200,000. The tractor is expected to have a life of 5 years, and a salvage value of $10,000. Annual maintenance costs will total $40,000. Annual net cash receipts resulting from this machine are predicted to be $90,000. The companys required rate of return is 15 percent.

Required:

1. Ignoring the time value of money, calculate the net cash inflow or outflow resulting from this investment opportunity.
2. Find the net present value of this investment using the format presented in Figure 8.2 (Links to an external site.). Round all calculations to the nearest dollar.
3. Should the company purchase the tractor? Explain.

1. 80,000 2. (3,418)

1. 60,000 2. (27,418)

1. 10,000 2. (3,418)

1. 9,000 2. (10,418)