What is the equivalent annual cost of the washer

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Reference no: EM13721522

Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $6,900 and sell its old washer for $2,900. The new washer will last for 6 years and save $1,650 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? (Do not round intermediate calculations. Round your answer to 2 decimal places)

Reference no: EM13721522

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