Question: #36 A farmer is considering two different tractors for his business. Each tractor has a different price but also a different life span. The farmer

#36 A farmer is considering two different tractors for his business. Each tractor has a different price but also a different life span. The farmer will have to replace either tractor at the end of its useful life and start again. We will assume that the farmer has a discount rate of 10.00%. MODEL A: Initial cost of $14,277.00, Yearly operating cost of $970.00 for 7.00 years. MODEL B: Initial cost of $12,465.00, Yearly operating cost of $1,591.00 for 10.00 years. What is the NPV of buying tractor A?(HINT: This will be a negative number) Submit Answer format: Currency: Round to: 2 decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
