Calculate the eac for each copier

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Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $1,000 and will last for 3 years. The copier will require a real aftertax cost of $130 per year after all relevant expenses. The RH45 costs $1,500 and will last 5 years. The real aftertax cost for the RH45 will be $105 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 4 percent per year, and the nominal discount rate is 12 percent.

Question 1: Calculate the EAC for each copier

Reference no: EM132539736

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