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A machine which has a 10 year life will cost $11,000 now with annual operating costs of $500 the first year and increasing $50 per year each of the next 9 years. If the salvage value is estimated to be $2,000 at the end of the 10th year, what is the equivalent annual cost of operating this machine for the next 10 years if other opportunities exist to have the investment dollars invested where they would earn an 8% minimum acceptable rate of return?

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Category:- Accounting Basics
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