FIN 526 – Bridgestone Golf Academy is evaluating different golf practice equipment.
Bridgestone Golf Academy is evaluating totally different golf apply gear. The "Dimple-Max" gear prices $45,000, has a three-year life, and prices $5,000 per yr to function. The related low cost price is 12 %. Assume that the straight-line depreciation technique is used and that the gear is absolutely depreciated to zero. Moreover, assume the gear has a salvage worth of $10,000 on the finish of the venture's life. The related tax price is 34 %. All money flows happen on the finish of the yr. What's the equal annual price (EAC) of this gear?