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University of Texas is considering purchasing a power supply system. The system costs $300,000, has a useful life
University of Texas is considering purchasing a power supply system. The system costs $300,000, has a useful life
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of 10 years, and will cost $20,000 per year to keep running. The system uses straight line depreciation and the salvage value is zero at the end of year 10. The tax rate is 30% and cost of capital is 12%. What is the (after taxes) equivalent annual cost of the battery?
a. $58,095 b. $58,879 c. $59,762 d. $60,092 e. $61,891
please do no use excel. I need to this on a calculator.
