What is the annual equivalent expense

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Reference no: EM131505715

Question: Major overhaul expenses of $5,000 each are anticipated for a large piece of earthmoving equipment. The expenses will occur at EOY four and will continue every three years thereafter up to and including year 13. The interest rate is 12% per year.

a. Draw a cash-flow diagram.

b. What is the present equivalent of the overhaul expenses at time 0?

c. What is the annual equivalent expense during only years 5-13?

Reference no: EM131505715

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