Question: Your company is looking at purchasing a front - end loader at a cost of $ 1 1 0 , 0 0 0 . The

Your company is looking at purchasing a front-end loader at a cost of $110,000. The loader would have a useful life of five years with a salvage value of $10,000 at the end of the fifth year. The loader can be billed out at $102.00 per hour. It costs $28.00 per hour to operate the front-end loader and $37.00 per hour for the operator. There are 1,200 billable hours per year
1. Should you purchase this loader using a MARR of 20%?_________________
2. Why or why not purchase? Prove It______________________________
3. How long does it take to recover the initial purchase cost if considering the MARR? ____
4. What are the minimum billable hours to keep the purchase profitable? _______
5.How to determine the actual rate of return for this purchase?

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