You plan to operate the same type of machine for 8 years, Ask an Expert

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You plan to operate the same type of machine for 8 years. Machine A lasts 2 years and Machine B lasts 8 years. Machine A costs $14,000 and Machine B costs $16,000. The salvage value of Machine A is $4,000 and the salvage value of Machine B is $3,300. Annual operation and maintenance costs are $6,000 for Machine A and $6,500 for Machine B. Both machines can be purchased in the future at the same price as today, and their salvage values and annual costs will remain as they are now. Your MARR is 16.2%?. What is the Annual Equivalent Cost?

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Financial Management, Finance

Category:- Financial Management
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