Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer the question fully and clearly. You need to choose between two machines based on the following information: Machine 1 has a 4 year

please answer the question fully and clearly.
image text in transcribed
You need to choose between two machines based on the following information: Machine 1 has a 4 year life, costs 8922,500 with pre-tax operating costs of $64,500 per year. Machine 2 has a 3 year life, costs 4425,250 with pre-tax cperating costs of (39,600 per year. Both machines have a salvage value of 22,500 and are classed with a CCA rate of 18% per year. The company tax rate is 30% and the discount rate is 10%. a) What is the EAC? b) Which machine would you select as an investment? Answer Place onlyyour finalenswer in the box. b) Which Machine? Show your work here (mandator): You need to choose between two machines based on the following information: Machine 1 has a 4 year life, costs 8922,500 with pre-tax operating costs of $64,500 per year. Machine 2 has a 3 year life, costs 4425,250 with pre-tax cperating costs of (39,600 per year. Both machines have a salvage value of 22,500 and are classed with a CCA rate of 18% per year. The company tax rate is 30% and the discount rate is 10%. a) What is the EAC? b) Which machine would you select as an investment? Answer Place onlyyour finalenswer in the box. b) Which Machine? Show your work here (mandator)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Econometric Modelling Of Financial Time Series

Authors: Terence C. Mills, Raphael N. Markellos

3rd Edition

052171009X, 1107714125, 9780521710091, 9781107714120

More Books

Students also viewed these Finance questions