Tide company is planning to replace old machinery with new, more efficient equipment. The company spent $100,000 on a market study months ago. The new machinery will cost $2,500,000 and has an estimated salvage value of $400,000. In order to make the machinery operatable, the Tide must pay $120,000 for shipping and $150,000 for training. With the anticipated growth due to the machinery replacement, Tide has to invest $90,000 in working capital. The machinery will be depreciated via the simplified straight-line depreciation method over its 25 year life. What is the annual depreciation expense?

• $98,400
• $102,400
• $110,800
• $84,000
• $94,800

A company is evaluating an 8-year project that costs $200,000 and has annual net cash flows of $50,000 per year. The companys cost of capital is 13%. What is the equivalent annual annuity of the project ?

• $4,992
• $8,323
• $91,677
• $41,677
• $39,939