about 5 years before it needs replaced. The operating cost per machine is $16,000 a year. What is the equivalent annual co of one machine if the required rate of return is 12 percent?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...
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Jackson amp; Sons uses packing machines to prepare its products for shipping. One machine costs $178,000 and lasts
about 5 years before it needs replaced. The operating cost per machine is $16,000 a year. What is the equivalent annual cost
of one machine if the required rate of return is 12 percent?
Select one:
O O O O O
a. $81,006.15
b.
$65,378.93
c.
$54,224.08
d.
$79,004.12
e. $38,556.67
Transcribed Image Text:Jackson amp; Sons uses packing machines to prepare its products for shipping. One machine costs $178,000 and lasts about 5 years before it needs replaced. The operating cost per machine is $16,000 a year. What is the equivalent annual cost of one machine if the required rate of return is 12 percent? Select one: O O O O O a. $81,006.15 b. $65,378.93 c. $54,224.08 d. $79,004.12 e. $38,556.67
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