You have decided to invest $$180,000$ for manufacturing equipment for a new product line.

The manufacturer of the equipment has prescribed the following preventative maintenance

progam to ensure the equipment will perform as expected:

After $12,000$ hours of operation, maintenance that costs: $$23,000$

After $24,000$ hours of operation, maintenance that costs: $$27,500$

After $36,000$ hours of operation, maintenance that costs: $$32,000$

The operating costs of the equipment is expected to be: $$10,000$ for every $6000$ hours use.

The life of the equipment is: $6$ years

The salvage value of the equipment is expected to be: $$29,700$ after $6$ years

You expect to use the equipment $6000$ hours per year.

What is the equivalent annual cost of owning the equipment?

  

Answer rating: 100% (QA)

Given information Initial investment 180000 Maintenance costs after 12000 hours 23000 Maintenance co... View the full answer