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You are operating an old machine that is expected to produce a cash flow 0f $5,000...

You are operating an old machine that is expected to produce a cash flow 0f $5,000 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $20,000 but is much ore efficient and will provide a cash flow of $10,000 a year for 4 years.

Calculate the equivalent annual cost of the new machine if the discount rate is 15% (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Should you replace your equipment now?

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jeff jeffy answered 10 months ago
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