Question

Larry's Lawn Service needs to purchase a new lawnmower costing $7,756 to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of four years, with no salvage value at the end of that period.

Required
a. If Larry's required rate of return is 11%, what level of annual cash savings must the lawnmower generate to be considered an acceptable investment under the net present value method?
b. If Larry's required rate of return is 14%, what level of annual cash savings must the lawnmower generate to be considered an acceptable investment under the net present value method?



$1.99
Sales4
Views328
Comments0
  • CreatedFebruary 21, 2014
  • Files Included
Post your question
5000