Problemautomated manufacturers uses high-tech equipment to, Ask an Expert

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Problem:

Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $52,000 a year to operate. The machines have a 6-year life after which they are worthless.

Required:

Question: What is the equivalent annual cost of one these machines if the required return is 16 percent?

-$301,586
-$295,667
-$256,947
-$453,657
-$427,109

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167180

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