Harriet Harvester (HH) plans to buy a haymaker. It costs $17,500 and is expected to last for five years. She presently hires 6 workers at $1,000 per month for each of the three harvesting months each year. The equipment would eliminate the need for two workers. HH uses straight-line depreciation and projects a salvage value of $2,500. Her tax rate is 25% and opportunity cost of funds is 3.3%. Which is true?

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The Answer of Harriet Harvester (HH) plans to buy a haymaker. It costs $17,500 and is expected to last for five years. She presently hires 6 workers at $1,000 per month for each of the three harvesting months each year. The equipment would eliminate the need for two workers. HH uses straight-line depreciation and projects a salvage value of $2,500. Her tax rate is 25% and opportunity cost of funds is 3.3%. Which is true?

Harriet Harvester (HH) Plans to Buy a Haymaker