What is the annual cost of the lowest cost machine

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Reference no: EM132071406

You can choose between Machine A or B. Your annual interest rate is 9%. You need a Machine for 6 years (required service period).

Machine A costs $42,000 and lasts for 2 years. It has no salvage value, and costs an additional $15,000 each year to operate.

Machine B costs $90,500 and lasts for 3 years. It has a salvage value of $20,000 and costs $8,000/year to operate.

What is the Annual Cost of the lowest cost machine?

Reference no: EM132071406

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