A Machine Lasts 3 Years and Has a Purchase Price

question 2

Essay

A machine lasts 3 years and has a purchase price of $100. It costs $40 per year to operate and can be sold as junk for $15 at the end of its life. What is the EAC of the costs of operating a series of such machines into perpetuity if the discount rate is 15%?
A._15,3 -15/(1.15)³ = $181.47
The machine's equivalent annual cost is: $181.47/2.283 = $79.48

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Definitions:

Goal Challenge

A concept referring to the setting of objectives that are challenging yet attainable, aimed at motivating individuals or teams towards higher performance.

Unethical Behaviour

Actions or practices that violate moral or professional codes of conduct.

Positive Reinforcer

A stimulus that, when presented after a behavior, increases the likelihood of that behavior being repeated.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without prior learning or conditioning.