Deere Construction just purchased a new track hoe attachment costing $12,500. The CFO expects the implement will be used for 5 years, at which time its salvage value is estimated to be $4000. Maintenance costs are estimated at $0 the first year, increasing by $100 each year thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of the implement?
Deere Construction just purchased a new track hoe attachment costing $12,500. The CFO expects the implement will be used for 5 years, at which time its salvage value is estimated to be $4000. Maintenance costs are estimated at $0 the first year, increasing by $100 each year thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of the implement?
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 2P
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Deere Construction just purchased a new track hoe attachment costing $12,500. The CFO expects the implement will be used for 5 years, at which time its salvage value is estimated to be $4000. Maintenance costs are estimated at $0 the first year, increasing by $100 each year thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of the implement?
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