• A commercial loader currently costs $14,600 annually to operate and maintain. What is the most managers should pay today to replace this machine with one expected to last four years and cost only $4,750 per year to operate and maintain? The current machine should last another four years. The required return for this investment is 15%. (You are looking for the price that would give the current project and the new project the same effective annual cost.)
• $13,561
• $21,683
• $28,122
• $39,400
• $40,317