Question
You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a three-year life, and has pretax operating costs of $46,800
You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a three-year life, and has pretax operating costs of $46,800 per year. The Techron II costs $350,000, has a five-year life, and has pretax operating costs of $54,900 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $29,000. Assume the tax rate is 40 percent and the discount rate is 12 percent. |
Requirement 1: |
Compute the EAC for both the machines. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) |
EAC | |
Techron I | $ |
Techron II | $ |
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