What is the equivalent annual cost

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Question: You are evaluating a new machine that has a four-year life and costs $100,000. The pretax operating costs of operating the machine are $15240 per year. Use straight-line depreciation to zero over the project's life and assume an after-tax salvage value of $13, 200 at the end of four years. If your tax rate is 34 percent and your discount rate is 7 percent. What is the Equivalent Annual Cost (EAC)?

Reference no: EM131971135

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