Whispering Winds’s Lawn Service needs to purchase a new lawnmower costing $8,096 to replace an old lawnmower that cannot be repaired. The new lawnmower is expected to have a useful life of 7 years, with no salvage value at the end of that period.
If Whispering Winds’s 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.)
