Question: A machine costs $60,000 and requires $5,000 maintenance for each year of its three-year life. The maintenance costs are paid at the end of each

A machine costs $60,000 and requires $5,000 maintenance for each year of its three-year life. The maintenance costs are paid at the end of each year. After three years, the machine will be replaced. Assume a tax rate of 34% and a discount rate of 14 percent. If the machine is depreciated over three years using straight-line method, with no salvage value, what is the equivalent annual cost (EAC)?

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