AB Company is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year of its six-year useful life.The machine will cost $83,150 and has no salvage value.The machine has a 20% internal rate of return.(Ignore income taxes in this problem.)
Required:
What is the annual cost savings promised by the machine?

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The Answer of  AB Company is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year of its six-year useful life.The machine will cost $83,150 and has no salvage value.The machine has a 20% internal rate of return.(Ignore income taxes in this problem.)
Required:
What is the annual cost savings promised by the machine?

AB Company Is Considering the Purchase of a Machine That