You are evaluating two different silicon wafer milling machines. The Techron I costs $252,000, has a three-year life, and has pretax operating costs of $67,000 per year. The Techron II costs $440,000, has a five-year life, and has pretax operating costs of $40,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $44,000. If your tax rate is 23 percent and your discount rate is 12 percent, compute the EAC for both machines.

Techron 1

Techron 2