What is the annual profit from option 1?

What is the present value of the salvage value for option 2?

What is the NPV of option 1?

What is the NPV of option 2?

Which option should the company choose?

19. Your company needs to purchase a new track hoe and has narrowed the selection to two pieces of equipment. The first track hoe costs $100,000 and costs $32.00 per hour to operate. The second track hoe costs $110,000 and costs $27.00 per hour to operate. The operator costs $40.00 per hour. The revenue from either track hoe is $107.00 per hour. Using a useful life of four years, a salvage value equal to 20% of the purchase price, 1,200 billable hours per year, and a MARR of 20%, calculate the NPV for both track hoes. Which track hoe should your company choose