A Farm Must Decide Whether or Not to Purchase a New

question 33

Multiple Choice

A farm must decide whether or not to purchase a new tractor.The tractor will reduce costs by $2,000 in the first year,$2,500 in the second,and $3,000 in the third and final year of usefulness.The tractor costs $9,000 today,while the above cost savings will be realized at the end of each year.If the interest rate is 7 percent,what is the net present value of purchasing the tractor?

• A) $6,764
• B) $9,362
• C) $18,362
• D) None of the statements associated with this question are correct.

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Definitions:

Continuous-yes Close

A sales technique in which the salesperson leads the customer through a series of questions designed to elicit affirmative answers, culminating in agreement to the sale.

Assumptive Close

A closing technique where the salesperson assumes that the customer has already decided to purchase, and moves forward with steps toward finalizing the sale.

Control Module

A device or set of components that manages the operations of other components in a machine or system.