Location Transport

Need assistance on a finance homework question. How do I set up and solve?

Person bought a horse transporter for $35,000. Object to save on transporter rentals. She had been renting a transporter every other week for $200 per day plus $1.00 per mile. Trips are 80 or 100 miles total. She gives driver a $40 tip. With new transporter, she will pay $.45 a mile. Insurance is $1,200 a year. Transporter will be worth $15,000 after eight years when it will be sold. Is the transporter a positive NPV investment? Assume nominal discout rate of 9% and a 3% forcasted inflation rate. Taxes can be ignored.

Public Comments

1. ask a math teacher.