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"Machine A costs $27,000 to purchase and is worth $9,000 in 4 years at the end...

"Machine A costs $27,000 to purchase and is worth $9,000 in 4 years at the end of its service life. Machine B costs $20,000 to purchase and is worth $1,000 in 4 years at the end of its service life. Assume that these machines are needed for 4 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 10% 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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