You are evaluating two different silicon wafer milling machines. The Techron I costs $265,000, has a three-year
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You are evaluating two different silicon wafer milling machines. The Techron I costs $265,000, has a three-year life, and has pretax operating costs of $74,000 per year. The Techron II costs $445,000, has a five-year life, and has pretax operating costs of $47,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $35,000. If your tax rate is 22 percent and your discount rate is 10 percent, compute the EAC for both machines. Which do you prefer? Why?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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