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Jackson & Sons uses packing machines to prepare its products for shipping. They need to replace their primary packing machine and are considering two different
Jackson \& Sons uses packing machines to prepare its products for shipping. They need to replace their primary packing machine and are considering two different options. Machine 1 costs $405,700 and lasts 3 years before it needs replaced. The annual aftertax operating cost for the machine is $36,800. Machine 2 costs $534,400 and should last for 7 years. It has an annual aftertax operating cost of $23,950. What is the equivalent annual cost of each machine if the required return is 16 percent? EAC for Machine 1 = EAC for Machine 2 = Correct answers
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