What is the equivalent annual cost of one these machines

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Reference no: EM131348774

LUM, Inc. uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,520,000 to purchase plus an additional $48,000 a year to operate. The machines have a five-year life after which they are worthless. What is the equivalent annual cost of one these machines if the required return is 15.5 percent?

A. -$506,819.32

B. -$427,109.10

C. -$335,803.37

D. -$295,666.67

Reference no: EM131348774

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