You are inheriting a new car 5 years from now and you will now need a boat to go along with your new car. The boat will cost $15,000 five years from today. Your new job will provide you with some extra end of year cash to invest so you can save for that boat. How much do you need to put away each & every year so you will be able to afford that boat if the annual interest rate you can obtain is 5%? Show all work.
I own two tractors (individual assets) on my farm. I want to see one of them and it needs to be the asset that has the lowest annual return. Please calculate the annual return on these two individual assets and tell me which one to put up for sale.
•2007 John Deere tractor - purchased new for $15,000 and now worth $13,000. It has generated a cash flow of $4,250 for me last year
•2007 Kubota tractor - purchased new for $15,000 and now worth $17,500. It has generated a cash flow of $950 for me last year.