Loper Logistics is considering purchasing a front loader at a cost of $132,000. It would have...

Loper Logistics is considering purchasing a front loader at a cost of $132,000. It would have a useful life of eight years, at which time the salvage value is estimated to be $25,000. The front loader can be billed out at $102 per hour, and costs $35 per hour to operate. The operator costs $36 per hour. Each year has 1200 billable hours. Loper’s MARR is 15%. Find the rate of return on this investment.

Expert Solution

irr is the rate at which npv equals to zero. So, when irr = 60%, NPV is approximately equal to zero. Hence IRR is close to 60%.

please rate my answer well. Thanks in advance.

Rahul Sunny answered 2 years ago

Mullum Ltd is considering purchasing new laptop computers. The new laptops have an up-front cost (t=0)...

Mullum Ltd is considering purchasing new laptop computers. The new laptops have an up-front cost (t=0) of $2,400,000. The laptops are expected to have a four-year life, and will be fully depreciated on a straight-line basis over four years. The company anticipates that after four years, the salvage value will be $200,000. If Mullum goes ahead with the proposed product, it will have an effect on Mullum’s net working capital. At the outset, t = 0, net working capital will...

Your firm buys a new front loader tractor. The initial cost is $210,000. The useful life...

Your firm buys a new front loader tractor. The initial cost is $210,000. The useful life is 15 years. You expect the front loader's net cash flow every year should be $45,000. If your company's MARR is 6% what is the future worth of the front loader? Give your answer in dollars and include a + or - sign as needed.

A company is considering purchasing a new machine that would cost $60,000 and the machine would...

A company is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its four year life. At the end of four years it is believed that the machine could be sold for $12,000. The machine would increase EBDT by $42,000 annually. the company's marginal tax rate is 34%. What the RATFCF’s associated with the purchase of this machine? $31,800 $32,820 $30,452 $29,940

Cooley Landscaping Company borrows $300,000 for a new front-end dirt loader. The bank is willing to...

Cooley Landscaping Company borrows $300,000 for a new front-end dirt loader. The bank is willing to loan the funds at 8.5% APR with QUARTERLY payment at the end of each quarter for the next 10 years. What is the QUARTERLY payment and how much of the first payment is used to pay for the interest?

Cooley's landscaping needs to borrow $28,000 for a new front-end dirt loader. the bank is willing...

Cooley's landscaping needs to borrow $28,000 for a new front-end dirt loader. the bank is willing to loan the money at 8.5% interest for the next 5 years with annual, semiannually, quarterly, or monthly payments. what are the different payments that Cooley landscaping could choose for these different payment plans?

Cooley Landscaping needs to borrow $25,000 for a new front-end dirt loader. The bank is willing...

Cooley Landscaping needs to borrow $25,000 for a new front-end dirt loader. The bank is willing to loan the money at 10% interest for the next 5 years with annual, semiannual, quarterly, or monthly payments. What are the different payments that Cooley Landscaping could choose for these different payment plans? What is Cooley's payment with annual payments? What is Cooley's payment with semi-annual payments? What is Cooley's payment with quarterly payments? What is Cooley's payment with monthly payments?

Cooley Landscaping needs to borrow $26,000 for a new front-end dirt loader. The bank is willing...

Cooley Landscaping needs to borrow $26,000 for a new front-end dirt loader. The bank is willing to loan the money at 10% interest for the next 7 years with annual, semiannual, quarterly, or monthly payments. What are the different payments that Cooley Landscaping could choose for these different payment plans? What is Cooley's payment for the loan at 10% interest for the next 7 years with annual payments?

Ford is considering purchasing Tesla. It would cost $120 billion. Tesla has a beta of 2.15...

Ford is considering purchasing Tesla. It would cost $120 billion. Tesla has a beta of 2.15 and standard deviation of 17.15%. The expected return from purchasing the company is 14.67%. Prepare a statement to the executive committee with a recommendation to proceed or not. Be sure to address the following items: 1. Define beta and standard deviation in relation to the measures of risk they represent. 2. Address the risk-return tradeoff. 3. Incorporate Ford’s current financial position and cost of...

A company is considering purchasing some new machinery. Collectively, the acquisition cost would be $3.72 million...

A company is considering purchasing some new machinery. Collectively, the acquisition cost would be $3.72 million plus a transportation charge of $94,0000 to get the machinery to the plant. To better engineer the production flow, $450,000 was spent to pay a production consultant. Special electrical service would be required, that and related (required) plant upgrades will be $124,000. Training of the production workers costing $34,000 is also necessary. An increase in inventory of $75,000 is needed, to supply these raw...

Your firm, Agrico Products, is considering a tractor that would have a cost of $36,000, would...

Your firm, Agrico Products, is considering a tractor that would have a cost of $36,000, would increase pretax operating cash flows before taking account of depreciation by $12,000 per year, and would be depreciated on a straight-line basis to zero over 5 years at the rate of $7,200 per year beginning the first year. (thus, annual cash flows would be $12,000 before taxes plus the savings that result from $7,200 depreciation.) The manager disagrees about weather the tractor would last...

Question