1.2. Stellar Golf is evaluating different golf practice equipment. The high-end equipment costs

$60,000. It costs $10.000 to operate each year and has three years of life. The straight-line method of

depreciation is used, and the equipment is fully depreciated to zero over 3 years. The equipment will

have a salvage value of $15,000 at the end of the project's life. The relevant tax rate is 30%. The

relevant discount rate is 10%.

(a) Calculate the net cost of this equipment at t-0. (4 m)

(b)Calculate the equivalent annual cost of this equipment. (3 m)