What is the annual operations and maintenance cost

Reference no: EM131025006

1. Acme, Inc. is evaluating a new project to produce rockets. The project will involve $500,000 to purchase a new machine. Every year, Acme will need to spend $10,000 to keep the machine running and the revenue is $195,000 per year by selling the rockets. Every 5 years, Acme will have to spend $20,000 to update the machine. Acme, Inc. expects that the machine will last for 20 years, and at the end of 20 years, Acme will be able to sell the machine for $50,000. What is the annual operations and maintenance cost?

Reference no: EM131025006

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