The Gap has some of its jeans stone-washed under a contract with Vietnam Garment Corporation (VGC). If VGC’s estimated operating cost per machine is $26,000 for year 1 and it increases by $1500 per...

The Gap has some of its jeans stone-washed under

a contract with Vietnam Garment Corporation

(VGC). If VGC’s estimated operating cost per machine

is $26,000 for year 1 and it increases by

$1500 per year through year 5, the equivalent uniform

annual cost per machine over years 1 to 5, at

an interest rate of 8% per year, is closest to:

(a) $30,850 (b) $28,770

(c) $26,930 (d) $23,670