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You are considering investing $70,000 in new equipment. You estimate that the net cash flows will be $18,000 during the first year, but will increase
You are considering investing $70,000 in new equipment. You estimate that the net cash flows will be $18,000 during the first year, but will increase by $1,400 per year the next year and each year thereafter. The equipment is estimated to have a 9-year service life and a net salvage value of $11,000 at that time. Assume an interest rate of 10%. Click the icon to view the interest factors for discrete compounding when i= 10% per year. (a) Determine the annual capital cost (ownership cost) for the equipment. The annual capital cost is $.(Round to the nearest dollar.)
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