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Problem 6-26 EAC and Inflation Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $1,300 and will last

Problem 6-26 EAC and Inflation Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $1,300 and will last for 4 years. The copier will require a real aftertax cost of $160 per year after all relevant expenses. The RH45 costs $1,800 and will last 6 years. The real aftertax cost for the RH45 will be $135 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 5 percent per year, and the nominal discount rate is 13 percent. Calculate the EAC for each copier.

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