Problem:
Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $49,000 a year to operate. The machines have a 6-year life after which they are worthless.
Required:
Question: What is the equivalent annual cost of one these machines if the required return is 16 percent? Use depreciation using straight line to zero. Assume tax rate of 40%
Note: Please answer in proper manner and show all computations