What is the net present value of purchasing the tractor

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A farm must decide whether or not to purchase anew tractor. The tractor will reduce costs by $2,000 in the first year,$2,500 in the second and $3,000 in the third and final year of usefulness. The tractor costs $9,000 today, while the above cost savings will be realized at the end of each year. if the interest rate is 7%. What is the net present value of purchasing the tractor?

Reference no: EM13735503

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