Essay
The Equivalent Annual Cost method allows comparison of the costs of equipment with unequal lives. If Quick-roll machine has an eleven year life, and an NPV of $2,100, while the Zip-roller machine has a seven year life and an NPV of $2,000. Which machine would you choose if the business is expected to continue and the discount rate for both is 14%?
Correct Answer:
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EAC11 = 2,100/6.4951 = 323.32
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Correct Answer:
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EA...
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