Solution-What is the equivalent annual cost

What is the equivalent annual cost

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The "Dimple-Max" equipment costs $100,000, has a 4-year life, and costs $9,200 per year to operate. The relevant discount rate is 13 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $21,000 at the end of the project's life. The relevant tax rate is 34 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment?

Reference no: EM131382131

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What is the equivalent annual cost

Reference no: EM131382131

Reference no: EM131382131

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