Question
You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $110
You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $110 initially, and then $155 per year in maintenance costs. Machine B costs $180 initially, has a life of three years, and requires $130 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. |
The discount rate is 12 percent and the tax rate is zero. Calculate the EAC. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) |
EAC | |
Machine A | $ |
Machine B | $ |
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