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Strong Alum, Inc. uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,520,000 to purchase plus an
Strong Alum, Inc. uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,520,000 to purchase plus an additional $51,000 a year to operate. The machines have a fiveyear life after which they are worthless. What is the equivalent annual cost of one these machines if the required return is 15.5 percent? [Hint: Find NPV first, then find PMT] A) $556,947.08 B) $506,819.32 C) $407,819.31 D) $509,819.31 E) $295,666.67
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