Question
A generator costs $150 and requires $80 in maintenance for each year of its 3 year life. After 3 years this generator will be replaced
A generator costs $150 and requires $80 in maintenance for each year of its 3 year life. After 3 years this generator will be replaced by a new one. The generator is straight-line depreciable to zero and has no salvage value. Assume a tax rate of 35 percent and a discount rate of 15 percent. What is the Equivalent Annual Cost (EAC) of the generator?
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Foundations Of Financial Management
Authors: Stanley B Block, Geoffrey A Hirt
12th Edition
0073295817, 9780073295817
