Currently your firm leases its main manufacturing equipment. You are considering buying the equipment instead....
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Currently your firm leases its main manufacturing equipment. You are considering buying the equipment instead. You estimate that the equipment would cost $15,000 to buy today and then $1,900 each year for 3 years to maintain (after 3 years it will be worthless and you'll need to buy a new machine). If your discount rate is 9.9%, what is the equivalent annual cost (EAC) of buying the machine?
Answer: $7,921. Please show how to arrive at this answer.
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