A firm purchased some equipment at a price of $150,000. The equipment resulted in an...
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A firm purchased some equipment at a price of $150,000. The equipment resulted in an annual net savings of $6,000 per year during the 10 years it was used. At the end of 10 years, the equipment was sold for $110,000. Draw a cash-flow diagram that depicts the situation. Assuming an annual effective interest rate of 6.5%, what was the equivalent cost to the company of this transaction on the purchase date?
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