How much monthly revenue must generate per month

Reference no: EM131775011

Question: A contractor is considering purchasing a CAT 635E scraper. The loan the contractor is considering is a 36 month loan and requires a down payment of $75,000 and monthly lease payments of $10.000. The contractor believes she will spend $500 on maintenance the first month the scraper is used. The maintenance cost is projected to increase by $I 00 a month for the life of the lease. The contractor will also spend $40,000 on the 12th and 24th month for new tires. How much monthly revenue must the 635E generate per month to offset the costs? Assume the lease has a 6% interest rate that is compounded monthly. Solve this problem by hand.

Reference no: EM131775011

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