Question

Your company is looking at purchasing a front-end loader and has narrowed the choice down to...

Your company is looking at purchasing a front-end loader and has narrowed the choice down to two loaders. The investment in the larger loader yields the NPV of $28,372. The smaller loader would have a useful life of five years with a salvage value of $10,000 at the end of the fifth year. The smaller loader can be billed out at $90.00 per hour. It costs $28 per hour to operate the smaller front-end loader and $25 per hour for the operator. Using 1,200 billable hours per year determine the NPV for the purchase of the smaller loader using a MARR of 20%?

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