The School District is considering the purchase of two school buses. At present, school children are transported to and from the schools in the area using private bus drivers. The new school buses will cost US$54,530 and will have a useful life of 11 years. They will have negligible scrap value, which can be ignored. The new school buses would be more cost-effective, resulting in labor savings of $10,000 per year. What are the Factor of the Internal Rate of Return, and the discount factor (%) that will give a Net Present Value of 0?

The School District is considering the purchase of two school buses. At present, school children are transported to and from the schools in the area using private bus drivers. The new school buses will cost US$54,530 and will have a useful life of 11 years. They will have negligible scrap value, which can be ignored. The new school buses would be more cost-effective, resulting in labor savings of $10,000 per year. What are the Factor of the Internal Rate of Return, and the discount factor (%) that will give a Net Present Value of 0?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 10P

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