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 $175
You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $175 initially, and then $80 per year in maintenance costs. Machine B costs $245 initially, has a life of three years, and requires $195 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine.
The discount rate is 11 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.)
MACHINE A EAC=
MACHINE B EAC=
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Cost Management Measuring Monitoring And Motivating Performance
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook
2nd Canadian Edition
1118168879, 9781118168875
