Problem $7$

Aviara Golf Academy is evaluating different golf practice equipment. The "easy as pie"

equipment costs $$45,000,$ has a three$-$year life, and costs $$5,000$ per year to operate. The

relevant discount rate is $12$ percent. Assume that the straight$-$line depreciation down to

zero is used. Furthermore, it has a salvage value of $$10,000.$ The relevant tax rate is $34$

percent. What is the EAC of this equipment?