Q3 contractor is considering the purchase of either a new track-type tractor for $90,000 which has a 8 year life with an estimated net annual income of $30,000 and a salvage value of $10,000 or a used track-type tractor for $28,000 with an estimated net annual income of $15,000 If the contractors MARR is 22% which tractor, if any should you choose, use comparison on the basis of equal replacement condition.

Q3 contractor is considering the purchase of either a new track-type tractor for $90,000 which has a 8 year life with an estimated net annual income of $30,000 and a salvage value of $10,000 or a used track-type tractor for $28,000 with an estimated net annual income of $15,000 If the contractors MARR is 22% which tractor, if any should you choose, use comparison on the basis of equal replacement condition.

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter11: Pricing Concrete Work

Section: Chapter Questions

Problem 9RQ: Calculate the cost per cubic yard to place concrete using each of the alternatives described. The...

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Show the complete solution An existing machine in the factory has an annual maintenance cost of 40,000. A new and more efficient machine will require an investment of 90,000 and it is estimated to have a salvage value of 30,000 at the end of 8 years. Its annual expenses for maintenance is 22,000. If the company's MARR is 12%, will it be worthwhile to purchase the new machine using IRR method?