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Equivalent Annual Costs and Discount Rates

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A polisher costs $10,000 and will cost $20,000 a year to operate and maintain. If the discount rate is 10 percent and the polisher will last for 5 years, what is the equivalent annual cost of the tool?
A) 33.33%
B) 40.00%
C) 66.67%
D) 80.00%

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Solution Summary

The equivalent annual cost of a polisher is determined.

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Polisher cost $10,000
Annual maintenance and operating cost ...

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