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Old MathJax webview Vandalay Industries is considering the purchase of a new machine for the production of latex, Machine A costs $3,078,000 and will last
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Vandalay Industries is considering the purchase of a new machine for the production of latex, Machine A costs $3,078,000 and will last for six years. Variable costs are 30 percent of sales, and fixed costs are $220,000 per year. Machine B costs $5,274,000 and will last for nine years. Variable costs for this machine are 25 percent of sales and fixed costs are $155,000 per year. The sales for each machine will be $10.5 million per year. The required return is 9 percent, and the tax rate is 24 percent. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis. Calculate the EAC for each machine. (Your answers should be negative values and Indicated by minus signs. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.18.) Answer is complete but not entirely correct. Machine A Machine B 5.857.783.75 X 2,531,783.78 % s Which machine should the company choose? Machine A Machine B Vandalay Industries is considering the purchase of a new machine for the production of latex, Machine A costs $3,078,000 and will last for six years. Variable costs are 30 percent of sales, and fixed costs are $220,000 per year. Machine B costs $5,274,000 and will last for nine years. Variable costs for this machine are 25 percent of sales and fixed costs are $155.000 per year. The sales for each machine will be $10.6 million per year. The required return is 9 percent, and the tax rate is 24 percent. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis. Calculate the EAC for each machine. (Your answers should be negative values and Indicated by minus signs. Do not round Intermedlate calculations and round your answers to 2 declmal places, e.g., 32.16.) Answer is complete but not entirely correct. Machine A $ 5.857.783.75 X Machine B IS 2.531.763.78 X Which machine should the company choose? Machine A Machine B
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