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Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $1,700 and will last for 4 years. The copier
Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $1,700 and will last for 4 years. The copier will require a real aftertax cost of $200 per year after all relevant expenses. The RH45 costs $2,200 and will last 6 years. The real aftertax cost for the RH45 will be $175 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 6 percent per year, and the nominal discount rate is 12 percent. Calculate the EAC for each copier. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) EAC XX40 RH45 Which copier should the company choose? RH45 O XX40
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