Solution-Determine the equivalent annual cost of each

Determine the equivalent annual cost of each machine

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Question - Mountain Corporation is considering purchasing one of two photocopiers. The first copier will have an initial cost of $8,000 and will have operating costs of $1,000 per year during its 5 year life. The second photocopier will cost $10,500 and will have $1,100 per year during its 8 year life. If the company's required rate of return is 8%, determine the equivalent annual cost of each machine. Which photocopier should the company purchase and why?

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Determine the equivalent annual cost of each machine

Reference no: EM133044356

Reference no: EM133044356

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