A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. At an interest rate of 10% per year, what is the equivalent annual cost of the project?   First cost, $ −800,000 Equipment replacement cost in year 2, $ −300,000 Annual operating cost, $/year −950,000 Salvage value, $ 250,000 Life, years 4

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A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. At an interest rate of 10% per year, what is the equivalent annual cost of the project?

 

First cost, $

−800,000

Equipment replacement cost in year 2, $

−300,000

Annual operating cost, $/year

−950,000

Salvage value, $

250,000

Life, years

4

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