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5. You must decide between two machines with different lifetimes. The first machine costs $200,000 and lasts 3 years. You will depreciate it using straight-line

5. You must decide between two machines with different lifetimes. The first machine costs $200,000 and lasts 3 years. You will depreciate it using straight-line depreciation over its lifetime. It also costs $34,000 per year to operate. You will be able to sell this machine for $15,000 after 3 years. The second machine costs $550,000 and lasts 10 years. You will depreciate this machine straight-line over its lifetime. It costs $10,000 per year to operate. You will be able to sell this machine for $50,000 after ten years. The marginal tax rate is 34% and the appropriate discount rate is 15%. What are the machines' EACs and which do you prefer

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