A company that manufactures a revolutionary aeration system combining coarse and fine bubble aeration components had costs this year (year 1) of $9,000 for check valve components. Based on completion of a new contract with a distributor in China and volume discounts, the company expects this cost to decrease. If the cost in year 2 and each year thereafter decreases by $560, what is the equivalent annual cost for a five-year period at an interest rate of 10% per year?
A company that manufactures a revolutionary aeration system combining coarse and fine bubble aeration components had costs this year (year 1) of $9,000 for check valve components. Based on completion of a new contract with a distributor in China and volume discounts, the company expects this cost to decrease. If the cost in year 2 and each year thereafter decreases by $560, what is the equivalent annual cost for a five-year period at an interest rate of 10% per year?
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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A company that manufactures a revolutionary aeration system combining coarse and fine bubble aeration components had costs this year (year 1) of $9,000 for check valve components. Based on completion of a new contract with a distributor in China and volume discounts, the company expects this cost to decrease. If the cost in year 2 and each year thereafter decreases by $560, what is the equivalent annual cost for a five-year period at an interest rate of 10% per year?
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