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Lets say you are trying to determine what the equivalent annual cost (EAC) is for a machine you are considering purchasing. We are considering purchasing
Lets say you are trying to determine what the equivalent annual cost (EAC) is for a machine you are considering purchasing. We are considering purchasing a machine with a purchase (upfront) cost of $200,000, an annual operating cost (cash flow) of $20,000/year, and an expected life of 6 years. If our company has a WACC of 10% and using the CF functionality on your calculator, calculate what is the machines EAC?
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