The city of walford is considering the purchase of new road

Reference no: EM13370645

The CIty of Walford is considering the purchase of new road repair equipment costing $40,000 to achieve cash savings of $8,000 per year in operating costs. The predictable useful life is 10 years, with no terminal value. The city's minimum expected return is useful life is 10 years, with no terminal value. The city's minimum expected return is 14%.

a. Find what is the net present value of this investment?
b. Evaluate the internal rate of return?
c. What is the accounting rate of return based on the initial investment?
d. Find the payback period?

Reference no: EM13370645

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