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A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,592.00 to
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,592.00 to install, $5,157.00 to operate per year for 7 years at which time it will be sold for $6,943.00. The second, RayCool 8, costs $41,885.00 to install, $2,178.00 to operate per year for 5 years at which time it will be sold for $9,034.00. The firms cost of capital is 5.98%. What is the equivalent annual cost of the AC360? Assume that there are no taxes. Submit Answer format: Currency: Round to: 2 decimal places.
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,592.00 to install, $5,157.00 to operate per year for 7 years at which time it will be sold for $6,943.00. The second, RayCool 8, costs $41,885.00 to install, $2,178.00 to operate per year for 5 years at which time it will be sold for $9,034.00. The firms cost of capital is 5.98%. What is the equivalent annual cost of the AC360? Assume that there are no taxes.
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Answer format: Currency: Round to: 2 decimal places.
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Principles Of Managerial Finance
Authors: Lawrence J Gitman, Chad J Zutter
7th Edition
0133546403, 9780133546408
