What is the equivalent annual cost of the equipment

Reference no: EM131793722

Question: AGT Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $107,000, has a 4-year life, and costs $9,900 per year to operate. The relevant discount rate is 10 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $24,500 at the end of the project's life. The relevant tax rate is 34 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment?

Reference no: EM131793722

Questions Cloud

What should the accumulated depreciation be at december : Carson uses the sum-of-the-years'-digits method of depreciation. What should the accumulated depreciation be at December 31, 2011

How long should the sides of the removed squares be to max : If the piece of tin was originally 20 centimeters on a side, how long should the sides of the removed squares be to maximize the resulting volume?

Evaluate the financial risks : Evaluate the financial risks associated with operating internationally. If your chosen company does not operate internationally, evaluate what the financial

Human resource management use for their effectiveness : With multinational organizations what activities, processes, and policies does the Human Resource Management use for their effectiveness?

What is the equivalent annual cost of the equipment : AGT Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $107,000, has a 4-year life, and costs $9,900 per year.

Determine the medical services department charges : Determine the Medical Services Department charges for the year to each of the operating departments—Cutting, Milling, and Assembly

What is the cash paid for company : A company purchased $11,800 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. What is the cash paid for company on June 24.

Neural network to recognize the specific patterns : What is a neural network? How can we “teach” a neural network to recognize the specific patterns we’re interested in?

Determine the rate variance and time variance : Determine the rate variance, time variance, and total direct labor cost variance. Discuss what might have caused these variances

User Account

All Pages