What is the net present value of the new tractor

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Question - Suppose Farmer Ryan purchases a new tractor for mowing his pig pastures at a cost of $15,000. He expects this tractor to contribute $5,000 in net returns in the first year, and will decline by 10% of the previous year's net return contribution for the following three years. If Farmer John's required rate is 5%, what is the net present value of the new tractor?

Reference no: EM133025796

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