Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Martinez Growth Farms, a farming cooperative, is considering purchasing a tractor for $555,980. The machine has a 10-year life and an estimated salvage value of
Martinez Growth Farms, a farming cooperative, is considering purchasing a tractor for $555,980. The machine has a 10-year life and an estimated salvage value of $45,000. Delivery costs and set-up charges will be $13,000 and $420, respectively. Martinez Growth uses straight-line depreciation and has a required rate of return of 9% Martinez Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of 5420 . Fuel is $55 for eachuse 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, es, 15.2) Cash payback period years Net present value. (Round factor values to 5 decimal ploces, eg. 15.11212. Round Intermediate calculations and final answer to 0 decimal ploces, eg. 5,275.) TABLE 1 Future Value of 1 TAIIL: Future Value of an Aneuity of 1
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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