Tool Makers NV uses tool and die machines to produce equipment for other firms. The initial cost of one customized tool and die machine is 500,000 (paid today). This machine costs 6,500 a year to operate (the first payment will take place a year from today). Each machine has a life of 3 years before it is replaced (i.e. three payments of 6,500 in total). What is the equivalent annual cost of this machine if the required return is 6%?