Determine the incremental net present value for Problem 7. Which track hoe should your company choose? In

Question:

Determine the incremental for Problem 7. Which track hoe should your company choose?
In Problem 7, your company needs to purchase a new track hoe and has narrowed the selection to two pieces of equipment. The first track hoe costs $100,000 and costs $32.00 per hour to operate. The second track hoe costs $110,000 and costs $27.00 per hour to operate. The operator costs $28.00 per hour. The revenue from either track hoe is $95.00 per hour. Using a useful life of four years, a equal to 20% of the purchase price, 1,200 billable hours per year, and a of 20%, calculate the NPV for both track hoes. Which track hoe should your company choose?

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...