Tool Makers,Inc

Multiple Choice

Tool Makers,Inc. uses tool and die machines to produce equipment for other firms. The initial cost of one customized tool and die machine is $850,000. This machine costs $10,000 a year to operate. Each machine has a life of 3 years before it is replaced. What is the equivalent annual cost of this machine if the required return is 9%? (Round your answer to whole dollars.)

A) $325,797
B) $340,002
C) $345,797
D) $347,648
E) $351,619