Assume a machine costs $548,000 and lasts eight years before it is replaced. The operating cost...

Assume a machine costs $548,000 and lasts eight years before it is replaced. The operating cost is $109,600 a year. Ignore taxes. What is the equivalent annual cost if the required rate of return is 14 percent? (Hint: the EAC should account for both initial investment and annual operating costs)

		$227,732.37
		$235,885.17
		$244,608.94
		$251,835.43
		$266,744.08

Expert Solution

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Calc:

jeff jeffy answered 2 years ago

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