Question: 37 A farmer is considering two different tractors for his business. Each tractor has a different price but also a different life span. The farmer
37 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 project B? (HINT. The NPV will be negative) Submit Answer format: Currency: Round to: 2 decimal places
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