What is the equivalent annual cost of the machine

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Problem 1: Tool Makers manufactures equipment for use by other firms. The initial cost of one customized machine is $850,000 with an annual operating cost of $10,000, and a life of 3 years. The machine will be replaced at the end of its life. What is the equivalent annual cost of this machine if the required rate of return is 15 per cent and we ignore taxes?

Reference no: EM132969795

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