In: Finance
Data for two machines is as shown below:
Machine X | Machine Y | |
Initial Cost | $125,000 | $195,000 |
Life | 6 | 12 |
Salvage | 12% | 12% |
First year cost | $12,000 | $15,000 |
Increase in cost per year | $1,000 | $1,000 |
Rate (p.y.c.y.) | 5% | 5% |
Which of the following statements is TRUE if the price of Machine X is estimated to remain the same over the foreseeable future?
A. |
The EUAC for both the machines is the same. |
|
B. |
The EUAC of X is greater than that of Y by $3,600. |
|
C. |
The EUAC of X is less than that of Y by $3,600. |
|
D. |
The EUAC for the machines cannot be determined based on the information provided. |