What is the net present value of the mower-trailer project

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Reference no: EM13726402

In high school Jeff often made money in the summer by mowing lawns in the neighborhood. He just finished his freshman year of college and, after taking a Business 101 class, he has some ideas about how to scale up his lawn mowing operation. Previously, he had used his father's push mower, but he is thinking about getting a riding mower that will save time and allow him to do more lawns. He found a used, zero turn, riding mower on Craigslist for $1,400. He will also need a trailer to pull the mower behind his pickup; that will cost him an additional $800. With the new mower he can take on an additional 29 lawns per week at an average cash inflow of $21 per lawn he will receive at the end of each week. He has 12 weeks of summer in which to mow lawns. (For convenience, assume that the mower and trailer will have no value after Jeff is done with his work this summer.) The discount rate for Jeff is 5% (note that this is an annual rate). What is the Net Present Value of the mower/trailer project?

Reference no: EM13726402

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