Question: Jonathan Construction must replace a tractor. Cat and International are two of the best alternatives. Both are expected to last 6 years. If Jonathan has

Jonathan Construction must replace a tractor. Cat and International are two of the best alternatives. Both are expected to last 6 years. If Jonathan has MARR of 10%, which tractor would he chose?

Investment cost: (Cat) $15,000 (International) $22,500

Annual operating (Cat) $3,000 (International) $ 1,500

Salvage value (Cat) $2,000 (International) $4,000

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