Find the equivalent annual cost of both machines

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Reference no: EM132057308

A machine had a first cost of S11000 7 years ago and is expected to have an additional useful life of 8 years. Although it has no salvage value at the end of its useful life, it now has a trade in value of $5000 for a new improved machine. It costs $12000 annually to operate the old machine. The new machine, with a cost of S16000, has an expected life of 12 years and no salvage value. The annual operating cost of the new machine is $9000. Using an interest rate of 15%, find the equivalent annual cost of both machines.

Reference no: EM132057308

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