Produce specialized aluminum products for its customers

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Reference no: EM131893290

Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $49,000 a year to operate. The machines have a 6-year life after which they can be sold of 10% of the original cost. The equipment is in the 7 year MACRS group. What is the equivalent annual cost of one these machines if the required return is 16 percent and the company’s marginal tax rate is 30%?

Reference no: EM131893290

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