5% per year, a machine has a first cost of $8,00 costs and year-end salvage values as shown. The annu operate the machine for 3 years is closest to which va Year 123 Operating Cost, $ -1000 -1200 -1500 Salvage Value, $ 7000 5000 4200
5% per year, a machine has a first cost of $8,00 costs and year-end salvage values as shown. The annu operate the machine for 3 years is closest to which va Year 123 Operating Cost, $ -1000 -1200 -1500 Salvage Value, $ 7000 5000 4200
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:At i = 15% per year, a machine has a first cost of $8,000 and estimated operating
costs and year-end salvage values as shown. The annual equivalent cost if you
operate the machine for 3 years is closest to which value?
Year
123 45
Operating
Cost, $
-1000
-1200
-1500
-2000
-3000
= $-3,870
=$-3,505
= $-3,932
= $-3,637
=$-3,154
Salvage
Value, $
7000
5000
4200
3000
2000
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