In: Finance
You are evaluating two different silicon wafer milling machines. The Techron I costs $261,000, has a 3-year life, and has pretax operating costs of $70,000 per year. The Techron II costs $455,000, has a 5-year life, and has pretax operating costs of $43,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $47,000. If your tax rate is 21 percent and your discount rate is 11 percent, compute the EAC for both machines. |