Caterpillar Deere Case Capital investment $22,000 $26,200 $17,000 $5,200 $5,000 $3,500 Net annual revenue $7,000 $9,500 Salvage value $4,000 Useful life 4 years 3 years 5 years

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Three mutually exclusive earth-moving pieces of equipment are being considered for several large building projects in India over the next five years. The estimated cash flows for each alternative are given below. The construction company’s MARR is 15% per year. Which of the three alternatives, if any, should be adopted? State your main assumptions.

Caterpillar Deere
Case
Capital investment
$22,000
$26,200 $17,000
$5,200
$5,000 $3,500
Net annual revenue
$7,000
$9,500
Salvage value
$4,000
Useful life
4 years
3 years 5 years
Transcribed Image Text:Caterpillar Deere Case Capital investment $22,000 $26,200 $17,000 $5,200 $5,000 $3,500 Net annual revenue $7,000 $9,500 Salvage value $4,000 Useful life 4 years 3 years 5 years
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