You are evaluating two different silicon wafer milling machines. The Techron I costs $273,000, has a...

You are evaluating two different silicon wafer milling machines. The Techron I costs $273,000, has a 3-year life, and has pretax operating costs of $74,000 per year. The Techron II costs $475,000, has a 5-year life, and has pretax operating costs of $47,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $51,000. If your tax rate is 25 percent and your discount rate is 11 percent, compute the EAC for both machines.

Which machine do you prefer?

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jeff jeffy answered 2 years ago

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You are evaluating two different silicon wafer milling machines. The Techron I costs $273,000, has a...

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