Question: Machine cost = $15,000; life = 8 years; salvage value = $3,000. What minimum cash return would an investor demand annually from the operation of

Machine cost = $15,000; life = 8 years; salvage value = $3,000. What minimum cash return would an investor demand annually from the operation of this machine if he desires interest annually at the rate of 8% on his investment and accumulates a capital replacement fund by investing annual deposits at 5%?

Answer : $ 2456.66

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