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You are evaluating two different silicon wafer milling machines. The Techron I costs $ 3 0 0 , 0 0 0 , has a 3

You are evaluating two different silicon wafer milling machines. The Techron I costs $300,000, has a 3-year life, and has pretax operating costs of $83,000 per year. The Techron II costs $520,000, has a 5-year life, and has pretax operating costs of $49,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $60,000. If your tax rate is 24 percent and your discount rate is 12 percent, compute the EAC for both machines.

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