Tool makers inc uses tool and die machines to produce, Financial Management

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Tool makers inc uses tool and die machines to produce

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 8%?

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Financial Management: Tool makers inc uses tool and die machines to produce

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