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Annual equivalent cost

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"You plan to operate the same type of machine for 15 years. Machine A lasts 3 years and Machine B lasts 5 years. Machine A costs $7,000 and Machine B costs $9,000. The salvage value of Machine A is $2,000 and the salvage value of Machine B is $1,200. Annual operation and maintenance costs are $4,000 for Machine A and $4,300 for Machine B. Both machines can be purchased in the future at the same price as today, and their salvage values and annual costs will remain as they are now. Your MARR is 10.8%. Enter the Annual Equivalent Cost (AEC) as a POSITIVE number for the machine that should be selected."

Reference no: EM131942204

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