Bob is considering buying a new farming tractor for his farm. He has a choice between a John-Deere-XP tractor and a Sunflower-FT tractor. Bob has a MARR of 6%. John-Deere-XP: First Cost: $150,000. Life: 10 years, zero salvage value at the end of 10 years. Annual Expense (maintenance, charging, etc.): $3,000. Sunflower-FT First Cost: $200,000. Life: 15 years, zero salvage value at the end of 15 years. Annual Expense (maintenance, charging, etc.): $3,500. For a 10-year study period, what salvage value for the extra 5 years of life for Sunflower-FT would result in that both tractors are equivalent in Present Worth? $96,133.6 $87,734.1 $105.266,

Bob is considering buying a new farming tractor for his farm. He has a choice between a John-Deere-XP tractor and a Sunflower-FT tractor. Bob has a MARR of 6%. John-Deere-XP: First Cost: $150,000. Life: 10 years, zero salvage value at the end of 10 years. Annual Expense (maintenance, charging, etc.): $3,000. Sunflower-FT First Cost: $200,000. Life: 15 years, zero salvage value at the end of 15 years. Annual Expense (maintenance, charging, etc.): $3,500. For a 10-year study period, what salvage value for the extra 5 years of life for Sunflower-FT would result in that both tractors are equivalent in Present Worth? $96,133.6 $87,734.1 $105.266,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Scenario: You purchase... 10 acres of bare ground in an area zoned commercial/office. Streets and utilities are in the street. The price paid is $6 per square foot. Holding time: 5 years. If you want a: (a)15% annual return on your land, what will you have to sell the land for in 5 years? (Per square foot, not including any costs) (b) for a 15% total return? (per square foot, not including any costs)
Solve what is asked.
A farmer is about to make a lease or buy decision about a tractor. The tractor is financed at an interest rate of 8% for seven years, with an annual payment of $10 564. The cash flows of both options for seven years and the factors taken into consideration are summarized in the table below. Also, it is assumed that there are no repair costs associated with leasing the equipment. (a) Using net present value of cost, determine the best approach for the farmer. Purchase (b) Explain why fuel cost is not included in the comparison.
Farmer Smith has some ranch land. He can buy a heard of young steers for $10,000, graze them on his ranch, and sell them after 3 years for $40,000. He can then immediately buy another herd of young steers, graze them for 3 years, etc. Assume r=10%. What is the value of the land as a cattle ranch? (Choose the closest answer.) $8,063 $80,630 O $30,000 O $20,050
on Sami buys a used truck for $1,500. After using it for 3 years, he expects to sell it for $800. If i = 7.5% per year, the future worth in dollars is: Select one: O O a. $1,500 – $700(P/F,7.5%,3) b. $ 700 + 10% of $700 c. $700 - $1,500 (F/P,7.5%,3) d. $1,500 (F/P,7.5%,3) - 800
Use the following information for the next TWO (2) questions: A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by P2, 000 in the first year, P2, 500 in the second, and P3, 000 in the third and final year of usefulness. The tractor costs P9, 000 today, wihile the above cost savings will be realized at the end of each year. If the interest rate is 7 percent. QUESTION NO. 3 What is the present value of cash inflaw from purchasing the tractor? Your answer QUESTION NO.4 What is the net present volue of purchasing the tractor, accept or reject? Your ariswer
We purchase a new machine for $50,000 and it costs $2,500 to install. If we are in the MACRS 5 year class, what is the cost basis after two years? O a. $36,750 O b. $23,625 O c. $22,500 Od. $35,000
Assignment Scenario:Jerry wants to buy an assisted Living Facility in his home town. Currently, the facility makes a profit each year of $10,000. However, the current director mentioned that if Jerry and his company wanted to perform a remodeling on the facility, that he could increase the room rates and make a profit of $40,000 annually. The facility is currently listed for sale for $650,000. However, a local real estate agent for long-term care facilities explained to Jerry that the likelihood of keeping at full capacity after raising the room rates is 70%. Round your answers to the nearest 10th of a decimal ( 14.42659 = 14.4)1. Calculate the Return on Investment (ROI) if the remodel is not done within the first year, we will call this, scenario 1.2. Calculate the ROI for the second scenario, if we are able to remodel and charge more for rooms.3. Calculate the Expected Value of both scenarios. REMEMBER, the likelihood is 70% and the chance it will not happen is 30%.
Which one should you choose?
please answer within 30 minutes.
SUBJECT: ENGINEERING ECONOMICS (a) Identify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to be used (c)Show the complete solution. The final answer is already provided. Ricardo plans to own a 1 hectare lot after 10 years for an estimated cost of P5M. To accumulate this amount, he will make equal year and deposits in a fund earning 15% compounded annually. However, at the end of the 7th year, he decided to turn it into an agricultural farm and is planning to buy seeds and other things worth P2M. What should be his deposits in the last 3 years? Answer: A = P822,214.23
Subject: acounting