Determine what is the annual equivalent expense

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Major overhaul express of $5000 each are anticipated for a large piece of earthmoving equipment. The expenses will occur at EOY four and will continue every 3 years thereafter up to and including year 13. The interest rate is 12% per year.

a. Draw a cash-flow diagram.

b. what is the present equivalent of the overhaul expenses at time 0.

c. What is the annual equivalent expense during only years 5-13?

Reference no: EM13208546

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