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ALUM Inc. uses high-tech equipment to produce specialized products. Each one of its machines costs $1,243,000 to purchase plus an additional $78,000 a year to
ALUM Inc. uses high-tech equipment to produce specialized products. Each one of its machines costs $1,243,000 to purchase plus an additional $78,000 a year to operate. The machines have a five-year life after which they are worthless. What is the equivalent annual cost of one these machines if the required return is 16.5 percent? Year o Year 1 Year5 OCF Change in NWC Capital spending Total cash flow The EAC is (choose one from A/B/C/D/E): A A. -$462,061.04 B. -$427,109.10 C. -$335,803.37 D. -$395,666.67 E. -$556,947.08
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