Considering purchasing an automatic sprinkler system

Assignment Help Business Economics
Reference no: EM131097746

RealTurf is considering purchasing an automatic sprinkler system for its sod farm by borrowing the entire $35,000 purchase price. The loan would be repaid with four equal annual payments at an interest rate of 12%/year. It is anticipated that the sprinkler system would be used for 9 years and then sold for a salvage value of $1,500. Annual operating and maintenance expenses for the system over the 9-year life are estimated to be $8,500 per year. If the new system is purchased, cost savings of $15,000 per year will be realized over the present manual watering system. RealTurf uses a MARR of 15%/year for economic decision making. Based on an internal rate of return analysis, is the purchase of the new sprinkler system justified? Show the internal rate of return used to reach your decision.

Reference no: EM131097746

Questions Cloud

Mis program reflection document : 1. What were the goals all MIS courses you took had in common for your learning experience? (Some goals are similar or common among the MIS courses, but some goals are unique to a particular course.)
Individual annual salaries : Christine and peter earn a combine annual income of $190,500. If christine earns $30,500 per year more than peter, what are their individual annual salaries? Please set up and solve this problem following the steps below:
Do you believe it is psychologically healthy : Do you believe it is psychologically healthy or unhealthy to have the trait of "high" private self-consciousness? What about the trait of "low"private self-consciousness? Please respond in 100 words.
Capitalized cost for indefinite operation of the power plant : A new municipal power plant is being built in Highfill, AR. The initial installation will cost $25 million. Experience shows that major repair and renovation will have to occur every 5 years (beginning at year 5) at a cost of $7.5 million. Annual ope..
Considering purchasing an automatic sprinkler system : RealTurf is considering purchasing an automatic sprinkler system for its sod farm by borrowing the entire $35,000 purchase price. The loan would be repaid with four equal annual payments at an interest rate of 12%/year. It is anticipated that the spr..
Strengths regarding instructional design skills : Congratulations on the completion of your project! Instructional design involves continuous evaluation and requires you to identify areas for improvement as you learn new information.
What the theory predicts : Was your or the other person's attitude similar to what the theory predicts? Discuss.
Support the maximum gross weight : Estimate the Airspeed required to support the Maximum Gross Weight of your selected airplane (from 11. above) at an Altitude of 10000 ft. (As initially indicated, a more detailed table/Excel worksheet is beneficial to precision for this task.

Reviews

Write a Review

Business Economics Questions & Answers

  What is the Gini coefficient for the country

Suppose 40 percent of a population all receive an equal share of p percent of the nation’s income, where 50 ≤ p ≤ 100. The remaining 60 percent of population also shares the rest of the income equally. For any such p, what is the Gini coefficient for..

  Income and substitution eects

Explain what the income eect is. You may use plain English or use an illustrative example. However, you must convince me you know what it is without copying a denition. Repeat the above for the substitution eect.

  Monetary policies as they relate to business environment

You will explain monetary policies as they relate to the business environment. What is the effect of the extended period of low interest rates in the US economy on: (a) banks taking deposits, (b) individuals saving for retirement, (c) cities and town..

  Operating in a monopolistically competitive market

You know that you are operating in a monopolistically competitive market, that is, you are a small part of a large market with many competitors in this market. Should you increase or decrease production? Should you increase or decrease price?

  Demand for both goods double-utility function

Max has the utility function U(x, y) = x(y + 1). The price of x is $2 and the price of y is $1. Max’s Income is $11. How much x does Max demand? How much y? If his income doubles and prices stay unchanged, will Max’s demand for both goods double?

  Designed to detect multicollinearity in regression model

What statistic is designed to detect multicollinearity in a regression model?

  Q1 bertrand price competition the two firms have the same

q1. bertrand price competition the two firms have the same demand curve p100-4q marginal cost of firm 1 is 5 and for

  What future amount of money will be accumulated

What future amount of money will be accumulated 10 years from now by investing $1,500 now plus $2,200, 5 years from now at 8% interest compounded semi-annually?

  What are the positive and negative aspects of budget

What are the positive and negative aspects of budget deficits and surpluses? What policy is best for today's economy? Explain your answer.

  Project would remain profitable

If the firm's MARR is increased to 25%, what would be the required savings in leasing so that the project would remain profitable.

  What is the preferred regression method of analysis

Assume that you work for a nation-wide firm that has multiple store per state. When addressing major issues such as determining the factors that contribute to store profitability over time using company "big data" what is the preferred regression met..

  Free market economy is efficient way to allocate resources

The free market economy is an efficient way to allocate resources. However, this is not true 100% of the time. The government serves a role to intervene when maintaining competition and a legal structure. Also, goods and services that are not compete..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd