Annual operating cost of the vehicle

Assignment Help Financial Management

Reference no: EM131089413

CPM Construction plans to buy a truck for $150,000 and expects $100,00/year as an income. The company plans to sell it fro $15,000 at the end of Year 5. The annual operating cost of the vehicle is $60,000. 1) What is the IRR of this investment? 2) If the company uses a MARR of 12%, is this an attractive investment? Explain the reasoning for your answer.

Reference no: EM131089413

Questions Cloud

Practical applications of behavioural research managers : Organisational behaviour allows us to be more prepared to cope with the challenges of modern management and life in organisations. What do the practical applications of behavioural research tell managers?

Gold watch to a retiring employee : What interpersonal role is being performed by the manager who is awarding a gold watch to a retiring employee?

Computing technologies for the foreseeable future : The insatiable demand for everything wireless, video, and web enabled everywhere will be the driving force behind development in telecommunications, networking and computing technologies for the foreseeable future. Do you agree or disagree? Why?

How can you take credit cards payments across the net : Communications must be protected from undetectable alteration by third parties, in transmission on the internet - How can you take credit cards payments across the net?

Annual operating cost of the vehicle : CPM Construction plans to buy a truck for $150,000 and expects $100,00/year as an income. The company plans to sell it fro $15,000 at the end of Year 5. The annual operating cost of the vehicle is $60,000. 1) What is the IRR of this investment? 2) If..

Considering two potential investments-risk-averse investor : You are considering two potential investments. One is an established company with a history of consistent earnings growth, while the other is a new IPO with a short track record. You think that the stock of both companies will be worth $100 in three ..

Organizing-implementing and controlling marketing : Select a large health care provider with which you are familiar and discuss how that provider should set up its marketing department and what tasks it should address. Provide specific examples to support your response.

Calculations to account for the greater risk : For the last question, suppose you hear some information that leads you to believe that the stock is more risky than you first assumed. You still think that your assumption about the value of the stock in three years is the best estimate, but you are..

Personal marketing communications : Select a health care provider with which you are familiar and determine the best way for that provider to leverage word-of-mouth marketing. Explain your rationale.

User Account

All Pages