please check the answer before submit and add explanation to every steps Concord Growth Farms, a farming cooperative, is considering purchasing a tractor for $568,580. The machine has a 10-year life andan estimated salvage value of $54,000. Delivery costs and set-up charges will be $13,900 and $440, respectively. Concord Growthuses straight-line depreciation and has a required rate of return of 9%.Concord Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $440.Fuel is $60 for each use of the tractor. The present value of an annuity of 1 for 10 years at 9% is 6.41766.Click here to view PV tables.For the new tractor, compute the:(a)(b)Your answer is correct.Cash payback period. (Round answer to 1 decimal places, e.g. 15.2.)Cash payback period5.9 yearseTextbook and MediaAttempts: 1 of 2 used* Your answer is incorrect.Net present value. (Round factor values to 5 decimal places, e.g. 15.11212. Round Intermediate calculations and final answer to Odecimal places, e.g. 5,275.)Net present value$eTextbook and Media50320

Step 1:Computation of the cost of initial investment :Cost of tractor$568,580Add: Delivery…

Answered: Concord Growth Farms, a farming…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 4P

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Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?
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) 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.) Save for Later 6.2 $…
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