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Blue Spruces Lawn Service needs to purchase a new lawnmower costing $8,396 to replace an...

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Accounting

Blue Spruces Lawn Service needs to purchase a new lawnmower costing $8,396 to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of 6 years, with no salvage value at the end of that period. Click here to view the factor table.

(a) If Blue Spruces required rate of return is 11%, what level of annual cash savings must the lawnmower generate to be considered an acceptable investment under the net present value method? (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)
Annual cash savings should be $enter the annual cash savings in dollars

(b) If Blue Spruces required rate of return is 16%, what level of annual cash savings must the lawnmower generate to be considered an acceptable investment under the net present value method? (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)
Annual cash savings should be $enter the annual cash savings in dollars

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