Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,360,000 and will last for 7 years. Variable costs are 38 percent of sales, and fixed costs are $137,000 per year. Machine B costs $4,230,000 and will last for 10 years. Variable costs for this machine are 27 percent of sales and fixed costs are $129,000 per year. The sales for each machine will be $8.46 million per year. The required return is 10 percent and the tax rate is 21 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A? EAC A If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine B? EAC

Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,360,000 and will last for 7 years. Variable costs are 38 percent of sales, and fixed costs are $137,000 per year. Machine B costs $4,230,000 and will last for 10 years. Variable costs for this machine are 27 percent of sales and fixed costs are $129,000 per year. The sales for each machine will be $8.46 million per year. The required return is 10 percent and the tax rate is 21 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A? If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine B