Your company is looking at purchasing a loader at a cost of $125,000 The loader would have a useful life of seven years At the end of the seventh year the salvage value is estimated to be $10,000 The loader could be billed out at $85 00 per hour and costs $30 00 per hour to operate The operator cos...

The annual profit from the loader equals Annual Profit H ...

Your company is looking at purchasing a loader at a cost of $125,000. The loader would have

Question:

Your company is looking at purchasing a loader at a cost of $125,000. The loader would have a useful life of seven years. At the end of the seventh year the is estimated to be $10,000. The loader could be billed out at $85.00 per hour and costs $30.00 per hour to operate. The operator costs $25.00 per hour. Using 1,100 billable hours per year determine the for the purchase of the loader using a of 22%. Should your company purchase the loader?

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...