Which harvester is better using the simple payback method

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Reference no: EM13222499

Harvester Parameters Omega Kappa
Initial Cost $160,000 260,000

Annual revenues $250,000 $280,000 in year 1 increasing by
5% annually thereafter.

Annual costs $170,000 in year 1 270,000
increasing by $20,000 annually thereafter.

End-of-life salvage value $50,000 0

Useful life 4 years 8 years

MARR = 10%
C. Assignment Requirements

C1. Which harvester is better using the Annual Equivalent Worth (AEW) Method?
C2. Which harvester is better using the External Rate of Return (IRR) Method?
C3. Which harvester is better using the Simple Payback Method if the average recovery period (industry threshold) for this category of harvester is 3 years.

Reference no: EM13222499

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Which harvester is better using the simple payback method : C2. Which harvester is better using the External Rate of Return (IRR) Method C3. Which harvester is better using the Simple Payback Method if the average recovery period (industry threshold) for this category of harvester is 3 years.

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