You Wish to Buy a New Lawnmower and You Are

question 56

Multiple Choice

You wish to buy a new lawnmower and you are deciding between a gas powered lawn mower and an electric mower.The electric mower costs $275 more than the gas mower,but you estimate that it will save you $40 per year by using cheaper electricity relative to gasoline.If the expected lifetime of both mowers is 30 years,and the cost of capital of 5%,what is the NPV of getting an electric mower instead of a gas mower?

• A)$40
• B)$340
• C)-$235
• D)-$275
• E)$925

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Definitions:

Hematoma

A tumor or swelling that contains blood.

Plunger

A tool used to clear blockages in pipes and drains, consisting of a rubber suction cup attached to a stick.

Syringe

A medical instrument used to inject or withdraw fluids from the body.

Barrel

A cylindrical container traditionally made of wooden staves bound by iron hoops, used for storing and transporting liquids like wine, oil, and beer.