Automated manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. each one of these machines costs $1,480,000 to purchase plus an additional $52,000 a year to operate. the machines have a 6-year life after which they are worthless. what is the equivalent annual cost of one these machines if the required return is 16 percent?

The machine costs 1,480,000 and has a life of 6 years with no salvage value. Which means that the depreciation cost of the machine each year is 1,480,000/6=246,666 and $52,000 operational cost which brings the annual cost to $298,666

But because the machines required rate of return is 16% we have to add in this as a cost as well so that annual cost will be

$298,666*1.16=$346,452

Explanation:

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.