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Homework answers / question archive / Equipment Purchasing The R&R construction company's purchasing organization with the approval of the CEO is to procure an excavator for their projects rather than outsourcing them
Equipment Purchasing
The R&R construction company's purchasing organization with the approval of the CEO is to procure an excavator for their projects rather than outsourcing them. This is a fully loaded CAT 450 loader backhoe, priced at $300,000. The estimated life of this machine is 10 years and during that period the estimated after-tax cash flows (EATCF) are given below. The investments required rate of return is 15%.
|
Year |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|
|
EATCF ($1,000) |
($300) |
$50 |
$55 |
$60 |
$60 |
$65 |
$65 |
$70 |
$70 |
$75 |
$75 |
|
Evaluate this investment, in terms of:
