A company must purchase a machine that will be used over the next eight years. The...

 

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A company must purchase a machine that will be used over the next eight years. The purchase price is $10,000, and the salvage value after eight years is $1000. The annual insurance cost is 2% of the purchase price, the electricity cost is $300 per year, and maintenance and replacement parts cost $100 per year. The effective annual interest rate is 6%. Neglect taxes. The effective uniform annual cost (EUAC) of ownership is most nearly (A) $1200 (B) $2100 (C) $2200 (D) $2300 A company must purchase a machine that will be used over the next eight years. The purchase price is $10,000, and the salvage value after eight years is $1000. The annual insurance cost is 2% of the purchase price, the electricity cost is $300 per year, and maintenance and replacement parts cost $100 per year. The effective annual interest rate is 6%. Neglect taxes. The effective uniform annual cost (EUAC) of ownership is most nearly (A) $1200 (B) $2100 (C) $2200 (D) $2300

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