Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple- Max" equipment costs $135,000, has a three-year life, and costs $15,700 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $19,500 at the end of the project's life. The relevant tax rate is 23 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) EAC $ 87.191.29

Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple- Max" equipment costs $135,000, has a three-year life, and costs $15,700 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $19,500 at the end of the project's life. The relevant tax rate is 23 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) EAC $ 87.191.29

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Description: Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $135,000, has a three-year life, and costs $15,700 per year tooperate. The relevant discount rate is 12 percent. Assume that the straight-linedeprec

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 18E

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