A company buys a machine for $ 10,000 and sells it for $ 2,000 at the end
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Question:
A company buys a machine for $ 10,000 and sells it for $ 2,000 at the end of year 3. Running costs of the machine are:
Year 1 = $ 3,000
Year 2 = $ 5,000
Year 3 = $ 7,000
If a series of machines are brought, run and sold on an infinite cycle of replacements, what is the equivalent annual cost of the machine if the discount rate is 10%?
(A) $ 22,114
(B) $ 8,288
(C) $ 246
(D) $ 7,371
Related Book For
International Accounting
ISBN: 978-1260466539
5th edition
Authors: Timothy Doupnik, Mark Finn, Giorgio Gotti, Hector Perera
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