Equivalent annual cost of an oven


Champion Bakers uses specialized ovens to bake its bread. One oven costs $689,000 and lasts about 4 years before it needs to be replaced. The annual after tax operating cost per over is $41,000. What is the equivalent annual cost of an oven if the required rate of return is 13 percent?

$272,638

$248,313

$232,407

$200,561

$196,210

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Finance Basics: Equivalent annual cost of an oven
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