David is excited that after 9 years, and having withdrawn from a school record 25 classes, he
Question:
David is excited that after 9 years, and having withdrawn from a school record 25 classes, he graduated from Albion College last year with a major and minor in ceramics. Shockingly, finding no viable job in his field, he decided to pursue his long-time passion and started his own business, David's Yoga Pants Inc. He is contemplating purchasing new automated production equipment to save on production costs. He is considering two possible machines for purchase. Machine A has a life of 3 years, an initial cost of $6,000 and annual operating costs of $300. Machine B has a life of 5 years, an initial cost of $7,000 and annual operating costs of $270.Assume DYP has a 10% required return. Calculate the equivalent annual cost for each machine. Show all work and be neat.
EACA= _______________
EACB=__________________
South Western Federal Taxation 2018 Essentials Of Taxation Individuals And Business Entities
ISBN: 9781337386173
21st Edition
Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney