"Machine A costs $39,000 to purchase and is worth $10,000 in 5 years at the end...

"Machine A costs $39,000 to purchase and is worth $10,000 in 5 years at the end of its service life. Machine B costs $13,000 to purchase and is worth $2,000 in 3 years at the end of its service life. Assume that these machines are needed for 15 years (required service period). Each machine can be repurchased at the same price in the future, and assume the annual maintenance cost of each machine is negligible. Use 13% annual interest rate.
Compute the Annual Equivalent Cost (AEC) of each machine and enter the AEC of the machine that should be purchased as a positive number."

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jeff jeffy answered 1 year ago

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