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ou are evaluating two different silicon wafer milling machines. The Techron I costs $210,000, has a three-year life, and has pretax operating costs of $53,000
ou are evaluating two different silicon wafer milling machines. The Techron I costs $210,000, has a three-year life, and has pretax operating costs of $53,000 per year. The Techron II costs $370,000, has a five-year life, and has pretax operating costs of $26,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $30,000. If your tax rate is 34 percent and your discount rate is 8 percent, compute the EAC for both machines.
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