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Calculate the equivalent annual cost of the new machine

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Reference no: EM132952714

You are operating an old machine that is expected to produce a cash inflow of $6,400 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $21,400 but is much more efficient and will provide a cash flow of $12,100 a year for 4 years.

Problem 1: Calculate the equivalent annual cost of the new machine if the discount rate is 15%.

Reference no: EM132952714

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