Assume a machine costs $404,000 and lasts four years before it is replaced. The operating cost is $47,000 a year. Ignore taxes. What is the equivalent annual cost if the required rate of return is 12.5 percent?(Hint: the EAC should account for both initial investment and annual operating costs)

$163,297

$174,825

$181,414

$195,637

$202,118