Compute the annual equivalent cost of each machine and, Financial Management

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Compute the annual equivalent cost of each machine and

Machine A costs $30,000 to purchase and is worth $9,000 in 5 years. Machine B costs $15,000 to purchase and is worth $2,000 in 2 years. Assume that these machines are needed for 20 years and can be repurchased at the same price in the future. (use 13% interest rate)

Compute the Annual Equivalent Cost of each machine and subtract those values. Record the difference as a POSITIVE if Machine A is best, or a NEGATIVE if Machine B is best.

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