Jackson & Sons uses packing machines to prepare its products for shipping.One machine costs $397,500 and lasts 5 years before it needs replaced.The machine will be worthless after the 5 years.The annual aftertax operating cost per machine is $38,400.What is the equivalent annual cost of one machine if the required rate of return is 16 percent?
A)$148,556.67
B)$159,800.23
C)$156,004.12
D)$143,006.15
E)$154,224.08

Question

Quizplus · Accepted Answer

The Answer of Jackson & Sons uses packing machines to prepare its products for shipping.One machine costs $397,500 and lasts 5 years before it needs replaced.The machine will be worthless after the 5 years.The annual aftertax operating cost per machine is $38,400.What is the equivalent annual cost of one machine if the required rate of return is 16 percent?
A)$148,556.67
B)$159,800.23
C)$156,004.12
D)$143,006.15
E)$154,224.08

Jackson & Sons Uses Packing Machines to Prepare Its Products