In: Finance
You are evaluating two different silicon wafer milling machines. The Techron I costs $297,000, has a three-year life, and has pretax operating costs of $82,000 per year. The Techron II costs $515,000, has a five-year life, and has pretax operating costs of $55,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $59,000. If your tax rate is 23 percent and your discount rate is 11 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.)
Techron I
Techron II