What is the equivalent annual cost of an oven

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1. You purchased 50 shares of GE common stock on margin at $60 per share. Assume the initial margin is 50% and the maintenance margin is 35%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.

2. Champion Bakers uses specialized ovens to bake its bread. One oven costs $850,000 and lasts about 3 years before it needs to be replaced. The annual operating cost per oven is $10,000. What is the equivalent annual cost of an oven if the required rate of return is 10 percent? (Round your answer to whole dollars).

Reference no: EM131867970

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