Question
You are evaluating two different machines. Machine A costs $25,000, has a five-year life, and has an annual OCF (after tax) of $6,000 per year.
You are evaluating two different machines. Machine A costs $25,000, has a five-year life, and has an annual OCF (after tax) of $6,000 per year. Machine B costs $30,000, has a seven-year life, and has an annual OCF (after tax) of $5,500 per year. If your discount rate is 10 percent, using EAC which machine would you choose?
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
4th edition
978-0133428469, 013342846X, 133428370, 978-0133428377
