Question
you are considering the purchase of a new bulldozer at a cost of $250,000. You expect the dozer to generate average revenues of $4,000 per
you are considering the purchase of a new bulldozer at a cost of $250,000. You expect the dozer to generate average revenues of $4,000 per month. Average operating costs will be $1,000 per month and there is an annual service that will cost $3,000. You expect to keep the dozer for 10-years at which time it should sell $75,000.
a) When you draw a cash flow diagram, what is the net value (i.e., sum) of the cash flows that occur at year 0?
b) When you draw a cash flow diagram, what is the net value (i.e., sum) of the cash flows that occur at year 10?
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