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You are evaluating two different silicon wafer milling machines. The Techron I costs $297,000, has a three-year life, and has pretax operating costs of $82,000

You are evaluating two different silicon wafer milling machines. The Techron I costs $297,000, has a three-year life, and has pretax operating costs of $82,000 per year. The Techron II costs $515,000, has a five-year life, and has pretax operating costs of $55,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $59,000. If your tax rate is 23 percent and your discount rate is 11 percent, compute the EAC for both machines.

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