Calculate the equivalent annual cost of each machine

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Reference no: EM132017264

Specialty Clothing Corporation is considering the purchase of two machines for their ongoing operations. When a machine is worn out, it will be replaced with another machine, since it is integral to the operations of the business. The discount rate is 9%. The CFO has collected the following information on two possible choices: Machine A Machine B Initial cost 220,000 190,000 Useful Life 17 years 20 years Annual maintenance 1,900 3,000 Calculate the equivalent annual cost of each machine.

EAC A _______________

EAC B _________________

Which machine should Specialty Clothing Corporation choose? ____________

Reference no: EM132017264

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