You are evaluating two different aluminum milling machines. The Alumina I costs $240,000, has a three-year...

You are evaluating two different aluminum milling machines. The Alumina I costs $240,000, has a three-year life, and has pretax operating costs of $63,000 per year. The Alumina II costs $420,000, has a five-year life, and has pretax operating costs of $36,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $40,000. If your tax rate is 35 percent and your discount rate is 10 percent, which do you prefer? Why?

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jeff jeffy answered 2 weeks ago

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