andalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $$1,900,000$ and will last for $7$ years. Variable costs are $33$ percent of sales, and fixed costs are $$133,000$ per year. Machine B costs $$4,430,000$ and will last for $11$ years. Variable costs for this machine are $28$ percent of sales and fixed costs are $$111,000$ per year. The sales for each machine will be $$8\mathrm{.}86$ million per year. The required return is $10$ percent and the tax rate is $21$ percent. Both machines will be depreciated on a straight$-$line basis.

If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A$?$

If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A$?$

$ $-2,748,142\mathrm{.}45$

$$4,251,257\mathrm{.}55$

$$-13,379,108\mathrm{.}41$

$$-2,885,549\mathrm{.}57$

$$-2,610,735\mathrm{.}33$

If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine B$?$

$$,-2,645,005\mathrm{.}99$

$$-17,179,475\mathrm{.}28$

$$,4,354,394\mathrm{.}01$

$$,-2,777,256\mathrm{.}29$

$$,-2,512,755\mathrm{.}69$