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Ayayal Growth Farms, a farming cooperative, is considering purchasing a tractor for $576,700. The machine has a 10-year life and an estimated salvage value
Ayayal Growth Farms, a farming cooperative, is considering purchasing a tractor for $576,700. The machine has a 10-year life and an estimated salvage value of $59,000. Delivery costs and set-up charges will be $14,400 and $400, respectively. Ayayai Growth uses straight-line depreciation and has a required rate of return of 9%. Ayayai Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $400, Fuel is $50 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 the:
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