Question

White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 8 years ago. 8 years ago, the original purchase price of the equipment was $750,000 and the operating cost has averaged $255,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $234,000. The company’s MARR is 23% per year.

The equivalent annual cost of the equipment is determined to be $  .

Answer 1