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The two equivalent tractors in the following table are being considered for purchase by a Farm. The farm manager wants your input on selecting one
The two equivalent tractors in the following table are being considered for purchase by a Farm. The farm manager wants your input on selecting one of the two tractors based on both profitability and liquidity. If the farm has a minimum attractive rate of return of 15%, what are your recommendations based on capitalized worth analysis and payback period? Comment on your findings Tractor A Tractor B Purchase Price $12,000 Annual income S3,500 S1,500 (years 1-5) less expenses Salvage Value 1000 $8,000 $3,000 (years 6-15) $1000 15 Years aximum life 7 Years
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