7. (10 points) A new production machine costs $120,000 and will have a $10,000 salvage value...

 

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7. (10 points) A new production machine costs $120,000 and will have a $10,000 salvage value when disposed of in ten years. Annual repair costs are expected to be $0 in years 1, 2, 3 and 4, $5000 in year 5, $5500 in year 6, $6000 in year 7, $6500 in year 8, $7000 in year 9, and $7500 in year 10. If interest is 10%, what is the equivalent uniform annual cost of the new machine? 7. (10 points) A new production machine costs $120,000 and will have a $10,000 salvage value when disposed of in ten years. Annual repair costs are expected to be $0 in years 1, 2, 3 and 4, $5000 in year 5, $5500 in year 6, $6000 in year 7, $6500 in year 8, $7000 in year 9, and $7500 in year 10. If interest is 10%, what is the equivalent uniform annual cost of the new machine?

Answer rating: 100% (QA)

To calculate the equivalent uniform annual cost EUAC of the new machine we need to consider the init... View the full answer