Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bridgeport Growth Farms, a farming cooperative, is considering purchasing a tractor for $559,350. The machine has a 10-year life and an estimated salvage value
Bridgeport Growth Farms, a farming cooperative, is considering purchasing a tractor for $559,350. The machine has a 10-year life and an estimated salvage value of $40,000. Delivery costs and set-up charges will be $12,500 and $410, respectively. Bridgeport Growth uses straight-line depreciation and has a required rate of return of 9%. Bridgeport Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $410. Fuel is $55 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: (a) Cash payback period. (Round answer to 1 decimal places, e.g. 15.2.) Cash payback period years
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started