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Please help with attached problem from my home work Renegade Industries is considering the purchase of a new machine for the production of latex. Machine
Please help with attached problem from my home work
Renegade Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2.91 million and will last for six years. Variable costs are 32% of sales, and fixed costs are $1,939,267 per year. Machine B costs $4.88 million and will last for nine years. Variable costs for this machine are 21% of sales and fixed costs are $1,423,734 per year. The sales for each machine will be $10 million per year. The required return is 11 %, and the tax rate is 38%. 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 machine A. (Round answer to 2 decimal places. Do not round intermediate calculations) Topic: Capital Budgeting Problem margin of error +/- 0.1 (R/ 100))
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