What are the equivalent annual costs for two models

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Machine A costs $350,000 to purchase, result in electricity bills of $100,000 per year, and last for 10 years. Machine B costs $550,000 to purchase, result in electricity bills of $80,000 per year, and last for 15 years. The discount rate is 12%. What are the equivalent annual costs for two models? Which model is more cost-effective?

Reference no: EM132064324

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