(c) Annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%) Annual rate of return %
(c) Annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%) Annual rate of return %
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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Question
![Grouper Growth Farms, a farming cooperative, is considering purchasing a tractor for $559,050. The machine has a 10-year life and an estimated salvage value of $43,000. Delivery costs and set-up charges will be $12,800 and $410, respectively. Grouper
Growth uses straight-line depreciation and has a required rate of return of 9%.
Grouper Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $410. Fuel is $55 for each use of the tractor. The present value of an annuity of 1 for 10 years at 9% is 6.41766.
Click here to view PV tables.
For the new tractor, compute the:
(a)
Your answer has been saved. See score details after the due date.
Cash payback period. (Round answer to 1 decimal places, e.g. 15.2.)
Cash payback period
(b)
6.2
Your answer has been saved. See score details after the due date.
Net present value $
Net present value. (Round factor values to 5 decimal places, e.g. 15.11212. Round Intermediate calculations and final answer to O decimal places, e.g. 5,275.)
years
Annual rate of return
20090
Annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%.)
%
Attempts: 1 of 1 used
Attempts: 1 of 1 used](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51038f17-8323-46ef-a18b-b108bad15422%2F128a79ad-48ed-4d75-84e1-6b6f9aebf4a0%2Fho1k7kz_processed.png&w=3840&q=75)
Transcribed Image Text:Grouper Growth Farms, a farming cooperative, is considering purchasing a tractor for $559,050. The machine has a 10-year life and an estimated salvage value of $43,000. Delivery costs and set-up charges will be $12,800 and $410, respectively. Grouper
Growth uses straight-line depreciation and has a required rate of return of 9%.
Grouper Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $410. Fuel is $55 for each use of the tractor. The present value of an annuity of 1 for 10 years at 9% is 6.41766.
Click here to view PV tables.
For the new tractor, compute the:
(a)
Your answer has been saved. See score details after the due date.
Cash payback period. (Round answer to 1 decimal places, e.g. 15.2.)
Cash payback period
(b)
6.2
Your answer has been saved. See score details after the due date.
Net present value $
Net present value. (Round factor values to 5 decimal places, e.g. 15.11212. Round Intermediate calculations and final answer to O decimal places, e.g. 5,275.)
years
Annual rate of return
20090
Annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%.)
%
Attempts: 1 of 1 used
Attempts: 1 of 1 used
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