You are evaluating two different silicon wafer milling machines. The Techron I costs $246,000, has a three-year life, and has pretax operating costs of $65,000 per year. The Techron II costs $430,000, has a five-year life, and has pretax operating costs of $38,000 per year. For both milling machines, use straight-line depreciation to zero over the projects life and assume a salvage value of $42,000. If your tax rate is 21 percent and your discount rate is 10 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Which machine do you prefer?

multiple choice

• Techron I or TechronII

• Techron II