What is the equivalent annual cost of one machine

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Question - Home Products uses packing machines to prepare its products for shipping. One machine costs $397,500 and lasts 5 years before it needs replacing. The machine will be worthless after 5 years. The annual after-tax operating cost per machine is $38,400. What is the equivalent annual cost of one machine if the required rate of return is 16 percent?

Reference no: EM133153106

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