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You are evaluating two different silicon wafer milling machines. The Techron I costs $ 2 6 5 , 0 0 0 , has a three

You are evaluating two different silicon wafer milling machines. The Techron I costs $265,000, has a three-year life, and has pretax operating costs of $74,000 per year. The Techron II costs $445,000, has a five-year life, and has pretax operating costs of $47,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $35,000. If your tax rate is 22 percent and your discount rate is 10 percent, compute the EAC for both machines. Which do you prefer? Why? (note that the depreciation for tech 1 is 76,667 and the depreciation for tech 2 is 82,000).
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