(Solved):Don Garlits is a landscaper. He is considering the purchase of a new commercial lawn mower. Two…

 

Question

Don Garlits is a landscaper. He is considering the purchase of a new commercial lawn mower. Two machines are being considered, the Atlas and the Zippy.

Atlas Zippy
Initial Cost,$ -67,000 -93,000
Annual operating and maintenance cost, $Per year -8,600 -2,000
Annual income,$Per year 33,000 58,000
Salavage value,$ 5,000 10,000
Life, years 4 8

a. Construct the Incremental Cash Flow Diagram

b. Determine the Incremental cash flow equation for Future Worth.

c. Calculate the incremental rate of return

 

EXPERT ANSWER

a. Incremental

Scroll to top