Question
Jennifer runs a business grading roads. She needs to replace her grader and she has two choices. A new grader costs $130000 to purchase, will
Jennifer runs a business grading roads. She needs to replace her grader and she has two choices. A new grader costs $130000 to purchase, will yield a return of $45000 per year, and will have a salvage value of $20000 in 6 years. A used grader costs $370000 to purchase, will yield a return of $60000 per year, and will have a salvage value of $70000 in 2 years. She uses a discount rate of 3%. What will be the Annual Equivalent Amount for a new grader?
What will be the Annual Equivalent Amount for a used grader?
Answer to the nearest dollar. If the answer is negative then include the negative sign.
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