Answered step by step
Verified Expert Solution
Question
1 Approved Answer
you should use excel formula 2) The New World Soccer League is evaluating the purchase of a used van to transport equipment to games. The
you should use excel formula
2) The New World Soccer League is evaluating the purchase of a used van to transport equipment to games. The cost of the van is $10,000 and it is expected to have a useful life of three years. Insurance, maintenance and gas will cost $1,500 annually. At the end of three years it is expected the van could be sold for $2,500. By buying the van New World will save $3,700 annually on rental costs. Using a 11% discount rate/hurdle rate calculate the IRR and NPV. Ignore taxes and inflation. What decision should be made. Why? 1) ABC Yarn Company is evaluating buying a piece of equipment. The cost of the equipment is $40,000 and has a four year useful life. The equipment is expected to generate $16,000 of revenue per year for 4 years. There will be supply expenses of $2,000 a year, maintenance cost of $600 annually Using an 8% discount rate/hurdle rate calculate the IRR and NPV for proposed equipment purchase. Ignore taxes and inflation. What decision should be made. WhyStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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