Andrew is considering buying a new farming tractor for his tarm. He has a choice between a John-Deere-XP tractor and a Sunflower-FT tractor. Andrew has a MARR of 4%.John-Deere-XP:First Cost $150,000.Life 10 years, zero salvage value at the end of 10 yearsAnnual Expense (maintenance, charging, etc.) $3,000.First Cost $200,000.Life 15 years, zero salvage value at the end of 15 yearsAnnual Expense (maintenance, charging, etc.) $3,500.Sunflower-FTFor a 10-year study period, what salvage value for the extra 5 years of life for Suntiower-FT would result in that both tractors are equivalent in Present Worth?O$87,734.1OS115.190.O S80.015.8O$105.266.O$96,133.6

First we need to determine the present worth of John-Deere-XP.

Andrew is considening buuying a new tarming tractor for his tarm He has a choice between a John Deere-XP tractor and a Sunfower-FT tractor Andrew has a MARR of 4%. John-Deere-XP: First Cost $150,000. Life 10 years, zero salvage vatue at the end of 10 years Annual Expense (maintenance, charging, etc.) $3,000. SunflowerFT First Cost $200,000. Life 15 years, zero salvage value at the end of 15 years Annual Expense (maintenance, charging, etc.) S3.500. For a 10-year study period, what savage value for the extra 5 years of ite for Suntiower-FT would result in that both tractors are equivalent in Present Worth? $87.734.1 $115.190. Os80.015.8 $105.266. $96,133.6

Andrew is considening buuying a new tarming tractor for his tarm He has a choice between a John Deere-XP tractor and a Sunfower-FT tractor Andrew has a MARR of 4%. John-Deere-XP: First Cost $150,000. Life 10 years, zero salvage vatue at the end of 10 years Annual Expense (maintenance, charging, etc.) $3,000. SunflowerFT First Cost $200,000. Life 15 years, zero salvage value at the end of 15 years Annual Expense (maintenance, charging, etc.) S3.500. For a 10-year study period, what savage value for the extra 5 years of ite for Suntiower-FT would result in that both tractors are equivalent in Present Worth? $87.734.1 $115.190. Os80.015.8 $105.266. $96,133.6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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