What is the equivalent annual cost of the washer

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Reference no: EM131067545

Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $8,700 and sell its old washer for $4,700. The new washer will last for 6 years and save $1,950 a year in expenses. The opportunity cost of capital is 16%, and the firm’s tax rate is 40%. What is the equivalent annual cost of the washer, if the firm uses straight-line depreciation?

Reference no: EM131067545

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