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Victoria purchase the new tractor

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Victoria Moving company is considering whether to purchase a new mini tractor for moving furniture within its warehouse. Victoria calculates that a new mini tractor would cost $3,000. Its current mini tractor generates $3,100 of cash flow per year. The new one will provide cash flow of $4,000 per year for next five years. What is the equivalent annual cash flow for the new mini tractor (round to the nearest dollar), and should Victoria purchase the new tractor? Assume the cost of capital is 10 percent

Reference no: EM132010212

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