Jackson & Sons Uses Packing Machines to Prepare Its Products

question 4

Multiple Choice

Jackson & Sons uses packing machines to prepare its products for shipping. One machine costs $136,000 and lasts about 4 years before it needs replaced. The operating cost per machine is $6,000 a year. What is the equivalent annual cost of one packing machine if the required rate of return is 12%? (Round your answer to whole dollars.)

• A) $38,556
• B) $50,776
• C) $79,012
• D) $101,006
• E) $154,224

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