6

Score: 0 of 2 pts 6 of 6 (O complete) HW Score: 0%, 0 of 14 pts P11-4 (similar to) Question Help (Related to Checkpoint 11.2) (Calculating EAC) Barry Boswells a financial analyst for Dossman Metal Works, Inc. and he is analyzing two alternative configurations for the firm's new plasma cutter shop. The two alternatives, denoted A and B below, will perform the same task, but alterative A will cost $85,000 to purchase, while alternative B will cost only $50,000. Moreover, the two alternatives will have very different cash flows and useful lives. The after-tax costs for the two projects are as follows: a. Calculate each project's EAC, given a discount rate of 10 percent b. Which of the alternatives do you think Barry should select? Why? a. Alternative A's EAC at a discount rate of 10% is $. (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer. 2 parts remaining Clear All Check Answer o Year Alternative A Alternative B 0 1 $(50,000) (4,000) (4,000) (4,000) OWN $(85,000) (19,000) (19,000) (19,000) (19,000) (19,000) (19,000) (19,000) 7