a$)$Why interest expenses are not included in the estimated cash flow for capital investment decisions?

b$)$You are evaluating two different silicon wafer milling machines. The Techron I costs $$215,000,$ has a three$-$

year life, and has pretax operating costs of $$35,000$ per year. The Techron II costs $$270,000,$ has a five$-$year

life, and has pretax operating costs of $$44,000$ per year. For both milling machines, use straight$-$line

depreciation to zero over the project$$s life and assume a salvage value of $$20,000.$ If your tax rate is $35$ percent

and your discount rate is $12$ percent, compute the EAC for both machines. Which do you prefer? Why?