Question
Assume the initial cost of a machine is $923,800 and it costs$67,300 a year to operate. The machine has a life of four yearsbefore it
Assume the initial cost of a machine is $923,800 and it costs$67,300 a year to operate. The machine has a life of four yearsbefore it is replaced. Ignore taxes. What is the equivalent annualcost of this machine if the required return is 14 percent?
A. $384,353
B. $297,152
C. $410,642
D. $177,496
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Financial Theory and Corporate Policy
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
4th edition
321127218, 978-0321179548, 321179544, 978-0321127211
