When purchasing more fertilizer from his local garden shop he saw a motorized driveable lawn mower on
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Question:
When purchasing more fertilizer from his local garden shop he saw a motorized driveable lawn mower on sale for $3,000. With this he expects to increase capacity and his lawnmowing capabilities by 6 times. He would still charge $30 per job, but would be able to do it three times as fast and thus increase capacity. The added cost of fuel is estimated to be $200 per year. Lando is unsure whether it's a good investment and wants to see what the net present value calculation returns. He is also curious what the cash payback period would be. If the investment makes sense, Lando can borrow the money on a 6.25% line-of-credit. Calculate NPV
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