Equivalent annual cost of the manufacturing operations

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Costs associated with the manufacture of a machine are $ 75,000 per year. They found that by spending $ 16,000 now to reconfigure the machine, the cost will go down to $ 58,000 next year and $ 62,000 in year 2 through 6. Using an interest rate of 10% per year, determine the equivalent annual cost of the manufacturing operations and the equivalent annual savings in year 1 through 6.

Reference no: EM131067907

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