You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a...

You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a 3-year life, and has pretax operating costs of $69,000 per year. The Techron II costs $450,000, has a 5-year life, and has pretax operating costs of $42,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $46,000. If your tax rate is 25 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.)

Expert Solution

Solution :

The EAC of Techron I = - $ 123,572.66

The EAC of Techron II = - $ 122,057.85

Please find the attached screenshots of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 9 months ago

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You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a...

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