What will be the average annual cost of ownership

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1. A new machine will cost $17,000 and will have an estimated salvage value of $14,000 in five years. Special tools for the new machine will cost $5000 and will have a resale value of $2500 ax the end of five years. Maintenance costs are estimated at $200 per year. What will be the average annual cost of ownership during the next five years if interest is 6%?

2. An investor wishes to invest $40,000. Venture A, requiring $40,000, will return 8%. Venture B, requiring $10,000, will return 15%. What return on the remaining $30,000 is required to equal the overall profitability of venture A?

Reference no: EM131954999

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