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Specialized bits (costing $50,000) used in the mining industry have a useful life of 5000 hours of operation and can be traded in when a

Specialized bits (costing $50,000) used in the mining industry have a useful life of 5000 hours of operation and can be traded in when a new bit is purchased for 10% of first cost. The drilling machine that uses the bit is used 1000 hours per year. What is the equivalent uniform annual cost of these bits at 2.5%?

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