A research laboratoty purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below.a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per yearYear12345678Cost, ₱1, 000200195190185180175170165 A research laboratory purchased a water jet cutter in which their total manufacturingcost is expected to decrease due to an increased productivity as shown on the tablebelow.Year2319541Cost, PhP1000561807175 1708165200190185a) Draw the Cash Flow Diagramb) Determine the equivalent annual cost at an interest rate of 8% per year

Equivalent annual cost (EAC) is the annual cost of owning and maintaining an asset determined by…

Answered: A research laboratoty purchased a water…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 21BEA

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A research laboratoty purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below.

a) Draw the Cash Flow Diagram

b) Determine the equivalent annual cost at an interest rate of 8% per year

Year

Cost, ₱

1, 000

200

195

190

185

180

175

170

165

A research laboratory purchased a water jet cutter in which their total manufacturing
cost is expected to decrease due to an increased productivity as shown on the table
below.
Year
2
3
195
4
1
Cost, PhP
1000
5
6
180
7
175 170
8
165
200
190
185
a) Draw the Cash Flow Diagram
b) Determine the equivalent annual cost at an interest rate of 8% per year

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