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 1 year ago

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