Jonathan construction must replace tractor

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Jonathan Construction must replace a tractor. Cat and International are two of the best alternatives. Both are expected to last 6 years. If Jonathan has MARR of 10%, which tractor would he chose?

Investment cost:                    (Cat)   $15,000              (International)   $22,500

Annual operating                   (Cat)   $3,000                 (International)   $ 1,500

Salvage value                         (Cat)    $2,000                 (International)   $4,000

Reference no: EM131354207

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