Baseline machine costs 65,000, has a three-year life and costs 12,000 per year to operate. The relevant discount rate is 10 per cent. Assume that the reducing balance (20 per cent) depreciation method is used. Furthermore, assume the equipment has a salvage value of 20,000 at the end of the projects life. The relevant tax rate is 24 per cent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment?