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A standby electric power generator was purchased 6 years ago for $8,000. At that time it was expected that the equipment would be used for
A standby electric power generator was purchased 6 years ago for $8,000. At that time it was expected that the equipment would be used for 15 years and would have a salvage value of 10% of the first cost. The generator is no longer needed and is to be sold now for $2,500. Using an interest rate of 12%, determine the difference between the anticipated and actual equivalent annual capital cost.
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