Explain what is the equivalent annual cost of the washer

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Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $13,650 and sell its old washer for $9,650. The new washer will last for 7 years and save $2,450 a year in expenses. The opportunity cost of capital is 15%, and the firm's tax rate is 30%. What is the equivalent annual cost of the washer, if the firm uses straight-line depreciation? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM13214766

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