2. A farmer must purchase a tractor using a loan of $20,000. The bank has offered the following choice of payment plans each determined by using an interest rate of 8%. If the farmer's minimum attractive rate of return (MARR) is 15%, which plan should he choose? Plan A: $2,956 per year for 4 years plus $15,000 at end of 5 years Plan B: Nothing for 2 years, then $9,048 per year for 3 years Plan C: $5,010 per year for 5 years

2. A farmer must purchase a tractor using a loan of $20,000. The bank has offered the following choice of payment plans each determined by using an interest rate of 8%. If the farmer's minimum attractive rate of return (MARR) is 15%, which plan should he choose? Plan A: $2,956 per year for 4 years plus $15,000 at end of 5 years Plan B: Nothing for 2 years, then $9,048 per year for 3 years Plan C: $5,010 per year for 5 years

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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