View the step-by-step solution to:

Schaefer Organic Farms purchased a new tractor at a cost of $80,000. Annual operating cash inflows are expected to be $40,000 each year for four...

Schaefer Organic Farms purchased a new tractor at a cost of $80,000. Annual operating cash inflows are expected to be $40,000 each year for four years. At the end of the tractor's useful life, the salvage value of the tractor is expected to be $4,000.

Required:

What is the net present value if the cost of capital is 12 percent? Use the time value of money charts for your calculations. (Ignore income taxes.) Round your answer to nearest whole number.
$

Top Answer

The answer to this question... View the full answer

NPV11.xlsx

Rate
Cost
Cash Inflow Year 1
Cash Inflow Year 2
Cash Inflow Year 3
Cash Inflow Year 4
NPV = 12%
-80,000
40,000
40,000
40,000
44,000
44,036

Sign up to view the full answer

Other Answers

Present value of Tractor Cash... View the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online