Mountain Corporation Is Considering Purchasing One of Two Photocopiers

Essay

Mountain Corporation is considering purchasing one of two photocopiers.The first copier will have an initial cost of $8,000 and will have operating costs of $1,000 per year during its 5 year life.The second photocopier will cost $10,500 and will have $1,100 per year during its 8 year life.If the company's required rate of return is 8%, determine the equivalent annual cost of each machine.