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Renegade Industries is considering the purchase of a new machine for the production of latex. Machine...
Renegade Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3.12 million and will last for six years. Variable costs are 31% of sales, and fixed costs are $2,006,820 per year. Machine B costs $4.92 million and will last for nine years. Variable costs for this machine are 24% of sales and fixed costs are $1,342,459 per year. The sales for each machine will be $9.4 million per year. The required return is 10 %, and the tax rate is 38%. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis.
Calculate the EAC for machine A. (Round answer to 2 decimal places. Do not round intermediate calculations)
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jeff jeffy answered 16 hours agoRelated Solutions
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