What uniform annual payment must be set aside

Reference no: EM132038700

Question: a. A piece of machinery costs 40,000 and has an estimated lifetime of 12 years. What uniform annual payment must be set aside at the end of each of these 12 years for any replacement if the interest rate is 6% per year?

b. The operating and maintenance expenses for a machine are expected to be 12,000 the first year and increase by 1000 per year during the 20 - yr. lifetime of the machine. What UNIFORM SERIES should be used to cover these expenses over the lifetime of the machine? Interest rate is 6% compounded annually.

Reference no: EM132038700

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