Chocoholics Anonymous wants to modernize its production machinery. The company's sales are $$8\mathrm{.}88$ million per year, and the choice of machine won't impact that amount. The required return is $10$ percent and the tax rate is $35$ percent. Both machines will be depreciated on a straight$-$line basis.

Machine Amaretto costs $$2,310,000$ and will last for $7$ years. Variable costs are $37$ percent of sales, and fixed costs are $$170,000$ per year.

Machine Baileys costs $$4,440,000$ and will last for $11$ years. Variable costs for this machine are $30$ percent of sales and fixed costs are $$80,000$ per year.

Required:

$($a$)$If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine Amaretto? $($Do not round your intermediate calculations.$)$

HINT: In EAC problems you first need to find the NPV$.$ Using this NPV you can then calculate the annuity $($annual cost$)$ that has the same present value$/$cost$.$ The lecture videos include a detailed example of this calculation.

$$3,166,873\mathrm{.}3$

$($b$)$If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine Baileys? $($Do not round your intermediate calculations.$)$