A machine costs ($60,000) and requires ($5,000) maintenance for each year of its three-year life. After three

Question:

A machine costs $$60,000$ and requires $$5,000$ maintenance for each year of its three-year life. After three years, this machine will be replaced. Assume a tax rate of 34 percent and a discount rate of 14 percent. If the machine is depreciated with a three-year straight-line without a salvage value, what is the equivalent annual cost (EAC)?

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